4 helpful estate planning tips for older parents

The UK has recently seen a rise in the number of men over 60 becoming fathers. The Office for National Statistics (ONS) reports a 14.2% increase between 2023 and 2024, with 1,076 babies born to fathers over 60.

Al Pacino, the “Godfather” himself, told the BBC that the birth of his fourth child at the age of 83 inspired him to write his autobiography. He also stated that he has enjoyed being a father later in life.

While joyful, having a child later in life can pose a unique set of considerations for estate planning, which is where you work out a strategy for distributing your wealth after you pass away.

Developing a robust estate plan is important for all families, but potentially more so if you had your children later than the average parent. You could also have children from two or more relationships who will become the beneficiaries of your estate, and navigating their age gaps and inheritances could be a challenge.

So, if you’re an older parent, keep reading to learn four key tips for aligning your estate plan to your family’s unique needs.

1. Ensure you meet the needs of multiple generations by clearly communicating your estate plan

Finding the balance might seem challenging, but you can start by asking yourself an important question.

“How do I ensure fairness and adequately provide for both sets of children?”

Perhaps you could start by:

• Ensuring clear and open communication where appropriate. Openly discussing your inheritance intentions with your older children can help to prevent misunderstandings and potential disputes. Managing expectations early could make a significant difference in the long run.
• Considering needs-based planning according to your children’s circumstances. Once you pass away, a younger child may need more ongoing financial support for a longer period compared to an older, financially independent child. This will depend on your circumstances, but it’s important to note that this method isn’t about favouritism. Rather, it’s about equity and ensuring all your children’s needs are met.
• Taking out life insurance where appropriate to help support your children’s financial needs. Some providers allow you to tailor your cover, providing for children who may continue to need guardianship, so it could be worth exploring your options with your financial planner.

Indeed, working with a financial planner can help with many aspects of estate planning, making it easier to chart a fair and appropriate way forward for all involved.

2. Protect your loved ones from disputes through careful planning and documentation

While important for all parents, if you have had children later in life, having the right paperwork in place ensures that your wishes are respected, your loved ones are protected, and that you retain control over your future.

Here are three key documents that could be key to your estate plan.

Your will

A will is a legally binding document that dictates who inherits your money, property, and possessions. You can also use a will to:

• Appoint guardians for young children
• Specify beneficiaries and make provisions for your family
• Appoint executors to carry out your wishes and manage your estate.

With a well-constructed will, you can ensure that all your loved ones are taken care of after you’re gone.

Lasting Powers of Attorney

A Lasting Power of Attorney (LPA) can be just as important as a will. This is a legal document that allows you to appoint one or more people (called “attorneys”) to make decisions on your behalf if you lose the capacity to do so yourself.

In the UK, there are two primary types of LPAs:

• A property and financial affairs LPA, which gives your chosen attorney the ability to manage your money, pay bills, sell property, and handle your financial affairs.
• A health and welfare LPA, which allows your attorney to make decisions about your medical care, daily routines, and housing.

LPAs can act as a shield against the long-term ramifications of unexpected injuries or illnesses, ensuring that important decisions about your care and finances are made by people you trust.

Trusts

Trusts are a legal arrangement that allows you to put assets aside for the benefit of a specific individual or a group of people.

They can be particularly useful for older parents, as your children may still be relatively young when you pass away. When the time comes, they may not be as financially established as an older child, perhaps as one in their 40s or 50s would be.

Setting up a trust could help provide for your younger children, either by offering a steady income or by releasing funds at certain times in their lives. This arrangement may help support your children through key life stages, such as in their education and into adulthood, even if you aren’t there to guide them.

Keep in mind that trusts can be complex, so it’s important to work with a financial planner before taking any action.

3. Understand the implications of Inheritance Tax when discussing your estate

While you might still have plenty of time with your children, the reality is that they may only leave home, start a career, or get married when you’re in your 60s or 70s.

This means that you could be supporting them financially for most of your life, including once you have entered retirement.

Navigating the nuances of raising children in your later years could also mean that you have less time for important financial tasks, such as developing a robust estate plan or planning for Inheritance Tax (IHT).

Indeed, estate planning for older parents often involves careful consideration of IHT. Having a carefully constructed estate plan in place could be essential to avoid a large tax bill.

To ensure you’re not rushing the process and potentially leaving your loved ones vulnerable, it could be worth exploring IHT mitigation strategies sooner rather than later.

There are a variety of ways to reduce your IHT liability and the size of your estate, though the exact method will depend on your personal circumstances and long-term financial goals.

Working with a qualified financial planner can help. Keep reading to learn how.

4. Seek financial advice to ensure a tailored solution for your family’s needs

Estate planning can be intricate, perhaps more so if you’ve become a new parent later in life. This is where financial advice can come in useful.

A financial planner can help you:

• Understand the legal and financial nuances of estate planning in the UK
• Find a suitable professional to assist you in drafting comprehensive documents, such as a sound will and Lasting Powers of Attorney (LPAs)
• Use various types of trusts to protect your wealth for your chosen beneficiaries 
• Mitigate potential disputes by proactively identifying and addressing potential areas of conflict
• Review and regularly update your estate plan as your life circumstances change.

Having children later in life can be a joyful and fulfilling experience. By addressing the intricacies of estate planning early on, you can ensure that your legacy provides security, clarity, and peace of mind for all involved.

This is something we can help with.

Email enquiries@jesellars.co.uk or call 01934 875 919 to find out more about how we can help you.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, will writing, trusts, or Lasting Powers of Attorney.

Note that life insurance and financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.