Have you made a New Year's resolution for 2018? When it comes to estate planning, the start of a New Year is the perfect time to reflect and consider whether your estate is in order. The following five suggestions are a good place to start.

Review your will

Review your will or if you haven’t got one, make one. Have your personal, family or financial circumstances changed in the last year? Does your will still do what you want it to? For example, do you have any new family members or have your assets changed? Do you know where your will is? You should keep your will and other important documents together in a safe place and let your family know where that is. Birketts offers free document storage for clients.

Put LPAs in place

Review your Lasting Powers of Attorney (LPAs) or Enduring Power of Attorney (EPA) – or if you haven’t got them, put LPAs in place. These are documents which allow you to appoint the people you trust (your attorneys) to make important decisions on your behalf, should you lose mental capacity. Are you still happy with who you have appointed as your attorney(s) and how they are appointed? Do you have both types of LPA: ‘property and financial affairs’ and ‘health and welfare’?

If you put an EPA in place before they were replaced by LPAs in October 2007 then you might want to consider putting in place a health and welfare LPA. Whilst your existing EPA remains valid, it only deals with your property and financial affairs.

If you do not have an LPA (or EPA) in place and you lose mental capacity, your loved ones would have to make an application to the court for someone to be appointed to make decisions for you (as your deputy). Such applications are costly and time-consuming. LPAs are not exclusively for later in life as they can give you peace of mind now, should something happen in the future. Furthermore, property and financial affairs LPAs can be used as soon as they are registered. Whilst you have mental capacity you can direct you attorneys to do things for you, such as sign paperwork and access your money. This can be helpful if, for example, you are abroad or physically unable to get out.

Consider tax planning

What is the value of your estate? Will any Inheritance Tax (IHT) be due on your death? Each individual has a nil rate band (NRB), currently £325,000. IHT on assets up to this value is charged at 0%. To the extent that it is unused, the NRB is transferrable to a surviving spouse on the first death. The current combined maximum NRB between spouses is therefore £650,000. In April 2017, the Government introduced a new additional nil rate band, currently £100,000, called the ‘residence nil rate band’ (RNRB) which applies in certain circumstances where residential property is owned. IHT is charged at 40% on the balance of your estate. You should therefore consider taking advice on whether the RNRB applies to your estate and how you can utilise your property in your wider tax planning. Do you hold your property as you intend? How does your property pass on death? You should consider taking advice on what options, exemptions and reliefs are available to reduce the value of your estate and therefore reduce the IHT payable on your death. For example, you could make lifetime gifts, change the way you hold property or make investments, if appropriate.

Make a list of lifetime gifts

In the last year did you make any large gifts? What about in the last seven years? Do you plan do so this year? When IHT is calculated at the date of your death, it will factor in the value of your estate at that date, together with the value of any assets given away in the seven years prior to that date. Whilst the gift may benefit from an exemption or relief from an IHT perspective, it is still important to keep a record of gifts made as it will assist those administering your estate on death.

Check your life insurance policies and pensions – or consider taking out a policy or contributing to a pension

Do you have a death in service benefit? Has the benefit been nominated? You should nominate the benefits as they will then pay out quicker to the nominated beneficiary on your death and will pass outside of your estate for IHT.