UK Wills, Lasting Power of Attorney and Estate Planning - What Every Early Retiree Needs to Sort Before It's Too Late

The legal and estate planning decisions that most people in early retirement keep deferring. Here's why they matter, what they involve and why doing them now is considerably better than waiting.

 

Let me start with an uncomfortable truth. 

Over 56% of UK adults do not have a will. [Cashasap] Without one, unmarried partners can inherit nothing. Step-children are excluded entirely. The people you'd want to make decisions for you if you couldn't make them yourself have no legal authority to do so. 

It's not because people don't know wills matter. It's because sorting it out feels complicated, slightly morbid and easy to defer. There's always something more pressing. The financial planning, the bridge strategy, the pension decisions all feel urgent. The will feels like something for later. 

This post is an argument for doing it now. Not because anything bad is imminent, but because the time to put legal and estate planning in order is when your affairs are straightforward, your mind is clear and the process is relatively simple. Not when circumstances have already made it urgent. 

 

I'm writing this partly as a reminder to myself. These are things I know I need to do and haven't yet completed. This post is as much a prod to action as it is a guide. 

As always, I'm not a legal adviser and this post doesn't constitute legal advice. Estate planning in particular, especially where IHT is in scope, is an area where professional advice is genuinely worth its cost. I'll signpost where to find it throughout. 

 

Why early retirement is exactly the right moment

The transition from full-time employment to early retirement is one of the most significant changes in your financial and personal circumstances you'll ever experience. Income stops. Asset structures change. The household dynamic shifts. The picture that was relevant five years ago may no longer reflect where you are. 

That makes it an ideal moment to review - or create - the legal documents that govern what happens if things go wrong. 

There are also specific early retirement factors that make this more pressing than it might be for someone still in full-time employment. 

Your pension becomes accessible and potentially in play. The April 2027 IHT change means pension pots above the threshold enter the estate. The interaction between your pension, your ISAs, your property and your IHT position may be more complex than it was a few years ago. 

You're between income sources. During the bridge years, living from ISAs and savings before the pension and State Pension kick in, you're more dependent on your plans holding up. If something happened to you during those years, would your partner have clear legal authority to manage your financial affairs? Is there a will that reflects the current asset picture? These questions matter more during the bridge than they did during employment. 

And the boring but true point: LPAs and wills are easiest to create while you have full mental capacity and your affairs are straightforward. Doing them now costs less, takes less time and involves less complexity than doing them later under pressure. [FeedSpot] 

 

Part 1 - Wills

• What happens if you die without one

If you die without a will, intestate in the legal term, your estate is distributed according to the rules of intestacy. These are fixed rules set by law. They have nothing to do with what you would have wanted. 

In England and Wales the intestacy rules work broadly as follows. If you're married or in a civil partnership your spouse inherits the first £322,000 and all personal possessions. Anything above that is split: half to the spouse and half equally to the children. If you have no children your spouse inherits everything. If you're not married, your partner inherits nothing regardless of how long you've been together. 

The consequences of intestacy can be significant. For a couple who are not married the non-owning partner could be left with nothing from the estate. For a blended family, with children from previous relationships alongside a current spouse, the intestacy rules may produce an outcome that bears no resemblance to the actual wishes of the deceased. For someone with property held in trust for a family member, the specific intentions around that property need to be clearly documented. 

Probate, the legal process of administering the estate, is also slower, more expensive and more complicated without a will. Your executors are appointed by the court rather than chosen by you. The whole process takes longer and costs more. 

• What a will should cover

A will is a legal document that sets out your wishes for what happens to your assets after your death. It names your executors, the people responsible for administering the estate. It specifies who inherits what. And it can include specific instructions about property, business interests, gifts to charity and trusts for children or other beneficiaries. 

For most people approaching early retirement the key elements are these. 

Who inherits the main home and in what circumstances. For married couples this is usually straightforward: everything to the spouse, then to children. For unmarried couples it needs to be explicitly stated. 

Who inherits the pension and investments. Note that pensions don't automatically pass under a will. They pass according to the expression of wishes nomination you make with your pension provider. This is separate from the will and needs to be kept up to date. More on this below. 

Specific property arrangements. If you own a property that a family member lives in, the will needs to address this clearly. Is it left outright? Is it left in trust? What happens if circumstances change? 

Guardianship for minor children. If you have children under 18 a will is the only mechanism for nominating a guardian. 

Your executors. The people responsible for administering your estate. They need to be people you trust, who are capable of the role and who are likely to outlive you. 

• How much a will costs

A simple single will costs from around £150 to £350 plus VAT from a solicitor. A mirror will for a couple - two complementary wills - costs around £350 to £500 plus VAT. More complex wills involving trusts, business interests or significant estates can cost considerably more. [Aimingforfire] 

DIY will-writing services are available online for considerably less, sometimes free. The risk is errors that make the will invalid or ambiguous. For anyone with a complex estate, such as property, significant pension assets or family arrangements that don't follow a simple pattern, a qualified solicitor or specialist will writer is worth the extra cost. 

The Society of Trust and Estate Practitioners has a directory of qualified practitioners at step.org The Law Society's find-a-solicitor service at solicitors.lawsociety.org.uk can help you find a local solicitor with wills and probate expertise. 

• When to update your will

A will is not a set-and-forget document. It needs to reflect your current circumstances. Common triggers for review include marriage or divorce. Note that marriage automatically revokes a previous will in England and Wales. Other triggers include the birth or death of a beneficiary, significant changes in the value or nature of your assets, or any change in your wishes about who should inherit. 

The transition to early retirement is itself a trigger. If your will was written when you were accumulating a pension through employment, it may not reflect the current picture: a significant pot, the April 2027 IHT change coming, property assets and specific intentions around them. 

• Pension nominations - the separate and critical document

This deserves specific emphasis because it's one of the most commonly misunderstood points in estate planning. 

Your pension does not pass under your will. It passes according to the expression of wishes, sometimes called a nomination of beneficiaries, that you file with your pension provider. 

Your pension provider is not legally bound by this nomination. But in practice, for registered pension schemes, the trustees follow the nomination in the vast majority of cases. Which means this document matters enormously. 

If your nomination is out of date, naming an ex-spouse, a deceased relative or simply someone you chose fifteen years ago, it may not reflect your current wishes at all. 

Check your nomination with every pension provider. Update it. And revisit it whenever your family circumstances change. 

From April 2027, with unspent pension funds entering the estate for IHT purposes, the pension nomination interacts with your IHT planning in new ways. This is one of the specific areas where professional estate planning advice before April 2027 is genuinely valuable. We've covered this in more depth in the Tax in Early Retirement post and the Bridge Years real numbers post. 

 

Part 2 - Lasting Power of Attorney

If you take nothing else from this post, take this section seriously. Of all the legal documents covered here, the LPA is the one most likely to be needed during your lifetime and the one most commonly left undone until it's too late. 

• What an LPA is

A Lasting Power of Attorney is a legal document that authorises someone you trust, your attorney, to make decisions on your behalf if you lose mental capacity to make them yourself. 

There are two types. 

1. A Property and Financial Affairs LPA allows your attorney to manage financial matters: accessing bank accounts, paying bills, selling property, managing investments and collecting pension and benefits. Unlike the Health and Welfare LPA, this type can be used while you still have capacity, if you choose to set it up that way. [FeedSpot] 
2. A Health and Welfare LPA gives your attorney authority to make decisions about your daily care, medical treatment, living arrangements and, if you specifically authorise it, life-sustaining treatment. This type can only be used once you've lost mental capacity. [FeedSpot] 

Both are separate documents. Both need to be registered separately with the Office of the Public Guardian. Both cost £92 each to register. 

• Why not having one is a serious problem

This is the point most people underestimate. Without an LPA, if you lose mental capacity your family cannot access your bank accounts, make decisions about your medical care or manage your property, even if they're your spouse or closest relative. They would need to apply to the Court of Protection for a Deputy-ship Order. [FeedSpot]

A Deputy-ship application costs between £2,000 and £5,000 or more and typically takes six to twelve months. [Meaningfulmoney] During that period your finances may be effectively frozen. Your spouse may be unable to access joint savings. Decisions about your care may be made by professionals rather than your family. 

This process costs more, takes longer, requires ongoing annual reports to the court and means a judge rather than you decides who manages your affairs. [FeedSpot] 

An LPA avoids all of this. The cost of setting one up is a fraction of the Deputyship cost. And it can only be created while you have mental capacity. Once you've lost capacity it's too late to create one. 

• Why the bridge years make this especially relevant

During the bridge years, with income from ISAs and savings and no salary, your financial affairs are more complex and more specifically managed than they were during employment. 

If you were to lose capacity during this period, your partner would need authority to access ISA accounts, manage savings withdrawals, handle investment decisions and potentially make decisions about the pension pot. Without a Property and Financial Affairs LPA the legal authority to do any of that is absent regardless of the relationship. 

This is the specific scenario that makes the LPA feel abstract right up until it isn't. 

• How to set up an LPA

The OPG's online service at gov.uk/power-of-attorney guides you through the process with clear prompts. [Meaningfulmoney] DIY is entirely possible for people with straightforward affairs. The main risk is errors in the form, particularly signing in the wrong order or leaving sections blank, which can result in rejection and the need to start again. 

In 2023/24 over 50,000 LPA applications were rejected by the OPG due to errors. [FeedSpot] Common mistakes include incorrect witness details, missing signatures and contradictory instructions. Using a solicitor significantly reduces this risk, and for anyone with a complex estate, family tensions or very specific instructions, professional help is worth the additional cost. 

The current registration fee is £92 per LPA, increased from £82 following the November 2025 change. [Campaignforamillion] Two LPAs, covering both Property and Financial Affairs and Health and Welfare, cost £184 to register in total plus any professional fees for drafting. 

If your gross annual income is under £12,000 you may qualify for a 50% fee reduction. Those receiving certain qualifying benefits may be fully exempt. [FeedSpot] 

The full application process is at gov.uk/power-of-attorney. 

 

Part 3 - Estate planning and inheritance tax

For many people in early retirement, particularly those who are mortgage free, have accumulated pension pots, hold property and have inherited capital, the estate will exceed the IHT thresholds. Understanding where you stand and whether any planning is worth doing is part of responsible financial management. 

This is genuinely an area for professional advice. What follows is an orientation rather than a plan. 

• The thresholds

The nil rate band is the amount that can pass free of IHT: £325,000 per person. This is frozen until 2030. [Cashasap] 

The residence nil rate band adds £175,000 where the main home passes to direct descendants, such as children or grandchildren. A married couple or civil partnership can combine both, meaning up to £1,000,000 can pass free of IHT on second death. Above those thresholds IHT is charged at 40%. 

For a mortgage-free couple with a significant pension pot, ISA savings, inherited capital and property, the combined estate can significantly exceed those thresholds. The April 2027 pension change brings unspent pension funds into scope, which changes the picture further. 

• The pension IHT change - plan before April 2027

We have covered this in several posts on this site and it bears repeating here in the estate planning context. 

From 6 April 2027, pensions will be included in IHT calculations, creating a double taxation risk for estates above the threshold. [Cashasap] The pension pot that currently sits entirely outside the estate will be assessed for IHT on death if the total estate exceeds the threshold. 

For anyone with a significant DC pension pot, above £325,000 as a rough guide, the interaction between the pension, the rest of the estate and the IHT thresholds needs to be modelled before April 2027. The optimal sequencing of which assets to draw down first may change significantly as a result. 

This is specifically covered in the [Bridge Years post] and the [SIPP post] on this site. 

• Gifts and the seven-year rule 

You can give money or assets away during your lifetime. If you survive seven years from making the gift it falls outside your estate for IHT purposes. If you die within seven years it may be subject to taper relief, with the IHT charge reducing on a sliding scale. 

Annual gift exemptions allow you to give £3,000 per year free of IHT regardless of the seven-year rule. Small gifts of up to £250 per person per year are also exempt. Gifts from surplus income, money you don't need for your own lifestyle, can be made without limit if they're regular and clearly documented. 

For early retirees who want to help children with property deposits or other significant costs, understanding the gift rules is useful. The interaction with the pension IHT change, and the question of whether to draw from the pension to fund gifts before April 2027, is one of the more complex planning questions currently worth discussing with an adviser. 

• Trusts

Trusts are a mechanism for holding assets in a way that separates legal ownership from beneficial ownership, allowing you to specify how assets are used and by whom over time. They can be useful for protecting assets for children from previous relationships, providing for a dependent with specific needs or managing the IHT position on a property. 

Trust planning is genuinely complex and entirely an area for professional advice. The basics are worth understanding, and the specific application to your circumstances requires specialist input. 

 

Finding professional help

For wills and LPAs: the Law Society's find-a-solicitor service at solicitors.lawsociety.org.uk or the Society of Trust and Estate Practitioners at step.org. 

For estate planning including IHT: a specialist solicitor or an independent financial adviser with estate planning expertise. MoneyHelper's guide to financial advisers is at moneyhelper.org.uk. 

For free guidance: Citizens Advice at citizensadvice.org.uk has useful introductory guidance on wills and LPAs. Age UK at ageuk.org.uk also covers both topics in plain English. 

 

A practical checklist

Here are the actions worth taking or checking, in priority order. 

1. Do you have a current will that reflects your current circumstances? If not, make one. If yes, when was it last reviewed? If it's more than five years old or your circumstances have changed significantly, review it. 
2. Do you have both types of LPA registered? If not, set them up now rather than later. The online service at gov.uk/power-of-attorney is the starting point. If your affairs are complex, use a solicitor. 
3. Is your pension expression of wishes up to date? Check with every pension provider. Update to reflect current wishes. 
4. Do you know where your IHT position stands? A rough calculation against the thresholds, covering pension pot, ISAs, savings and property, tells you whether IHT planning is worth professional attention. If your estate is likely to exceed £500,000 as a single person or £1,000,000 as a couple, it probably is. 
5. Have you discussed your wishes with the relevant people? Executors, attorneys and beneficiaries, the people involved in your estate and LPA, should know what's expected of them. A surprise is rarely welcome. 
6. Do you have a letter of wishes alongside your will? Not a legal document but a useful companion to it, explaining the reasoning behind decisions, setting out wishes about funeral and personal effects and providing context that the will itself can't always capture. 

 

A note on my own position

In the spirit of transparency that runs through this site, I have a will but it needs reviewing. It was written when circumstances were different and the asset picture has changed significantly since then. The pension expression of wishes is in place but hasn't been checked recently. 

The LPAs are something my wife and I have discussed and not yet done. This post is as much a reminder to myself as it is guidance for anyone else. 

The April 2027 deadline on pension IHT is the most urgent item on the estate planning list and the one that most clearly warrants the professional advice I've been discussing throughout this series. 

The honest position, as with several things on this site, is that the plan is known, the actions are clear and the doing is still in progress. I'll update when the doing catches up with the knowing. 

 

Tony writes about his personal journey to early retirement at freebefore65.co.uk. He is not a financial adviser and is not a legal adviser. All content reflects his own experience and research and should be taken as a starting point for your own thinking, not as professional advice. Always take regulated professional advice before making decisions about wills, LPAs and estate planning, particularly where IHT is in scope.