Estate Planning: Why Now is the Time to Update Your Will

Writing or updating a Will is one of those things that feels pressing for a moment, then often gets quietly pushed aside as the demands of everyday life take over.

But in 2026, there are stronger reasons than usual to move it up the priority list:

Frozen tax thresholds
Rising property and asset values
A landmark change is coming to the way pensions are treated on death

All of this means that estate planning decisions made several years ago may no longer reflect either your wishes or the current law.

If you have not reviewed your Will recently – or if you do not have one at all = now is the time to act.

What Happens Without a Will

Dying without a Will (known legally as dying “intestate”) means your estate is distributed according to the rules of intestacy. These rules are rigid, and they may bear little resemblance to what you would actually have wanted.

For example, under the intestacy rules in England and Wales, an unmarried partner receives nothing automatically. Everything passes to blood relatives instead, regardless of how your life together was structured.

Stepchildren are not included either, unless they were legally adopted.

Married couples and civil partners do far better under intestacy, but even they can face complications if the estate is large or the family situation is anything other than straightforward.

A Will puts you in control. It allows you to specify exactly who receives what, appoint guardians for any minor children and choose executors you trust to carry out your wishes. Without one, those decisions are taken out of your hands entirely.

The Threshold Problem: More Estates Are Now Affected by Inheritance Tax

One of the most significant issues for anyone reviewing their estate plan in 2026 is the ongoing freeze on inheritance tax (IHT) thresholds. The nil-rate band – the amount you can pass on before inheritance tax applies – remains at £325,000.

The residence nil-rate band (RNRB) can add a further £175,000 when a family home is passed to direct descendants, but this is also frozen. Both IHT thresholds are fixed until at least April 2030.

Meanwhile, house prices, pension values and investment portfolios have continued to rise. The practical effect is that a growing number of estates that were comfortably below the inheritance tax threshold a few years ago are now approaching or exceeding it – without the owner having done anything differently.

IHT is charged at 40% on anything above the available threshold. On a modest estate, that could represent a very significant sum. The good news is that there are several legitimate ways to reduce or manage that liability, but only if planning is done in advance.

The 2027 Pension Change: Why This Cannot Wait

Perhaps the most consequential development for estate planning in recent memory is the change announced in the 2024 Autumn Budget: from 6 April 2027, most unused pension funds will be brought within the scope of inheritance tax for the first time.

Under current rules, pension funds are not part of your estate. This has made them an extremely powerful estate planning tool.

Many people have deliberately structured their retirement income to draw on other assets first, leaving their pension largely intact to pass on to family members free of inheritance tax. From April 2027, that approach changes fundamentally.

Once pension funds are included in estate calculations, many families may face a much larger inheritance tax liability than they previously anticipated.

For some, it could mean a combined bill that includes 40% inheritance tax on pension assets as well as income tax on withdrawals, depending on how the funds are taken by beneficiaries.

This change does not make pension saving any less worthwhile (far from it). But it does mean that retirement income strategies and estate plans built around the old rules need to be revisited urgently. The window between now and April 2027 is an important one.

Reviewing Your Existing Will

Even if you already have a Will in place, it is worth asking when it was last reviewed. Life changes constantly. Marriages, divorces, births, deaths and changes in financial circumstances can all affect whether your Will still reflects your wishes.

A gift left to someone who has since died, or a guardian appointed for children who are now adults, can create uncertainty and delays for the people left behind.

There are also more subtle changes to consider. If your estate has grown significantly since your Will was written, the IHT position may now be very different.

If you have acquired new assets (a second property, a business interest, additional pension savings) these may not be adequately addressed by an older document.

And if the law has changed, as it has on pensions, even a well-drafted Will may no longer achieve what you intended.

As a general rule, it is worth reviewing your Will every three to five years — and immediately following any significant life event.

Powers of Attorney: The Piece Most People Forget

Estate planning is not only about what happens when you die. It is also about what happens if you lose the ability to make decisions for yourself due to illness, injury or cognitive decline.

A Lasting Power of Attorney (LPA) is a legal document that authorises someone you trust to make decisions on your behalf if you are no longer able to do so.

There are two types: one covering property and financial affairs, and one covering health and welfare.

Without an LPA in place, even a spouse or close family member may not be able to access your bank accounts, manage your investments or make decisions about your care.

LPAs can only be set up while you have the mental capacity to do so. Once capacity is lost, the option is gone. It is potentially one of the most important documents you will ever sign – and yet many people do not have one.

Practical Steps to Take Now

If estate planning has been on your list for a while, here is a starting point.

Make sure you have a valid, up-to-date Will. If you do not have one, or if your existing Will is more than a few years old, arrange to have it reviewed or drafted by a solicitor.

A Will is not a complex or expensive document to put in place – but the consequences of not having one could be significant.

Consider whether Lasting Powers of Attorney are in place for both property and financial affairs, and for health and welfare. If not, this should be a priority.

Review your pension nomination of beneficiaries. This is a separate document held by your pension provider and does not form part of your Will.

In light of the 2027 pension inheritance tax change, it is worth reviewing whether your nominations remain appropriate and how they fit with your broader estate plan.

Think about lifetime gifting. There are a number of annual exemptions and allowances that allow you to pass money to family members during your lifetime free of inheritance tax.

The annual exemption of £3,000 per person, for example, can be given away each year without any IHT implications. These allowances are use-it-or-lose-it – making a habit of using them can meaningfully reduce the size of your estate over time.

Finally, consider seeking professional advice. Estate planning sits at the intersection of legal and financial considerations. Getting it wrong, or leaving it too late, could have real consequences for the people you care about most.