5 ways to ensure your end-of-life financial planning is up to scratch

As we move into later life, financial priorities shift. The focus turns from building wealth to preserving it, passing it on, and ensuring affairs are in order. Whether you're in robust health or beginning to think about care needs, end-of-life financial planning is a vital part of securing peace of mind for you and your loved ones.

From updating your will to managing inheritance tax, here are five essential steps to help ensure your later life financial planning is thorough, thoughtful, and future-proofed.

1. Update your Will and legal documents

A Will is the foundation of any end-of-life plan. It ensures your assets are distributed according to your wishes and can help prevent confusion or conflict among family members. Yet many people either don’t have a will or haven’t updated it in years.

It’s a good idea to review your Will regularly, especially after major life events such as marriage, divorce, the birth of children or grandchildren, or the death of a spouse. Make sure it reflects your current wishes and includes all relevant assets. If you’ve acquired property, investments, or personal items of value, these should be clearly accounted for.

Alongside your Will, consider setting up a Lasting Power of Attorney (LPA) — or Continuing Power of Attorney if you're in Scotland. This legal document allows someone you trust to make decisions on your behalf if you lose the capacity to do so. It is crucial you do this at an early stage as you cannot appoint a Lasting Power of Attorney after you lose capacity. Otherwise, the process involves going through the Court of Protection to appoint someone as your deputy which can be lengthy and costly.

There are two types of LPA: one for property and financial affairs, and another for health and welfare. Both are crucial components of financial planning for end-of-life care, especially if you anticipate needing support with medical or care decisions.

2. Plan for Inheritance Tax (IHT)

Inheritance tax is often misunderstood and overlooked, but it can have a significant impact on the value of your estate passed on to beneficiaries. Currently, IHT is charged at 40% on estates above the threshold (known as the nil-rate band), which is £325,000 for individuals. However, additional allowances may apply, such as the residence nil-rate band if you’re passing on a home to direct descendants.

Even if you don’t consider yourself wealthy, rising property values and accumulated savings mean more estates are falling into the taxable bracket. In addition, unused pension pots are set to be included in calculations from April 2027. Planning early is essential.

There are several ways to reduce your IHT liability:

• Gifting: You can give away money or assets during your lifetime. Gifts within certain limits are immediately exempt, while others become exempt after seven years.
• Trusts: For larger estates setting up a trust can help you control how assets are used and potentially reduce IHT.
• Business Property Relief (BPR): Despite forthcoming changes, BPR is still an option to reduce inheritance tax.
• Charitable donations: Leaving at least 10% of your taxable estate to charity can reduce the IHT rate from 40% to 36%.

Professional advice is recommended to navigate the complexities of these options and ensure your strategy is appropriate and effective.

Find out more: How to pay less inheritance tax

3. Review your pension schemes and beneficiary nominations

Your pensions may be one of your largest assets, and how they’re treated after death depends on the type and your age at the time of passing. Defined contribution pensions, for example, can often be passed on tax-free if you die before age 75 under current rules, and taxed at the recipient’s marginal rate of income tax if you die later.

However, this is set to change from April 2027 when unused pots will be included in estate valuations, potentially creating an extra IHT liabilities for the unwary.

It’s essential to:

• Check your nominated beneficiaries with each pension provider. These nominations of where you want the money to go on death don’t automatically follow your Will, so they must be updated separately.
• Understand the pension rules of your specific scheme. Some older schemes, especially many defined benefit schemes, have limited death benefit options.
• Consider consolidation if you have multiple pensions, to simplify management and ease of administration for your loved ones.

This final step is particularly important in the context of financial planning for end-of-life care, as pensions may be used to fund care costs or support dependents.

4. Prepare for medical and care costs

Later life often brings increased health needs, and planning for these costs is a critical part of end-of-life financial planning. Whether it’s routine medical expenses, adaptions to your home, or long-term residential care, the financial impact can be significant.

Care costs in the UK vary widely depending on location, type of care, and individual circumstances. While some support may be available through the NHS or local authorities, many people end up funding care privately — sometimes by selling property or drawing down savings.

To prepare:

• Research care options and associated costs in your area.
• Factor care into your financial plan, alongside lifestyle spending and legacy goals.
• Consider insurance products such as long-term care insurance or annuities designed to cover care fees.

This is also a good time to think about your preferences for care and treatment, and to communicate these clearly with your family and professional advisers.

Find out more: How can you plan and pay for the price of long-term care?

5. Create a central resource for loved ones

In times of loss or crisis, clarity is invaluable. Creating a simple, central document or “open in the case of emergency” box, physical or digital, that outlines your key financial and legal information can make things much easier for your family.

This document should include:

• Contact details for your solicitor, financial adviser, and pension providers
• A summary of your assets, liabilities, and insurance policies
• Details of your Will, LPAs, and funeral preferences
• Secure access instructions for digital accounts and any other important documents

While this isn’t a legal document, it’s best to keep it updated and store it somewhere safe, ideally with a trusted person, and ensure all relevant parties know where to find it and what it contains.

How we can help

This article is just the tip of the iceberg for later life financial planning. There can be multiple factors to unpick with an uncertain trajectory of expenditure and other considerations such as tax. It is also about more than just numbers. It’s about ensuring dignity, clarity, and care – for  you and those you leave behind. 

With some careful planning you can secure your financial future and legacy. You also don’t have to tackle it on your own. Having a conversation with a financial professional can help you to take control of your finances, giving you freedom and peace of mind. 

To get you started our Financial Coaching allows offers an educational session based on the topic of your choice so you can get the most out of it. We offer a free, no commitment, 15-minute call with a qualified professional to discuss your needs, and after that each one-hour coaching session is charged at a one-off fee of £150 (including VAT).

Importantly, all our Financial Coaching is provided by regulated and qualified Financial Planners who work for Charles Stanley, a regulated company. Not only will you benefit from more formal experience and qualifications, but if your Financial Coach believes you would benefit from more comprehensive guidance, or even full financial advice, they will refer you to an advisory service.