Estate Planning Over 60 UK (2026): Will, LPA, IHT & Care Fee Planning Guide

Turning 60 is a natural inflection point for estate planning for several practical reasons: (1) Assets are usually larger: by 60, most people have accumulated the bulk of their lifetime assets — property (often mortgage-free or nearly so), pension pots, savings, and investments. The IHT exposure is typically at its highest in the 60s and 70s; (2) Health changes become more likely: conditions that affect mental capacity (dementia, stroke, severe illness) become statistically more common after 60. A Lasting Power of Attorney (LPA) made before capacity is lost is effective and costs £82 to register; an LPA application after capacity is lost is impossible — only a Court of Protection deputyship (6–12 months, £3,000–£5,000+) can substitute; (3) The LPA registration backlog: the Office of the Public Guardian currently takes 8–20 weeks to register an LPA. If capacity is lost before the LPA is registered, the OPG will refuse to register it. The LPA must be made and registered while the donor has full capacity; (4) Wills need to reflect your current life: marriages, divorces, births, deaths, significant asset changes, and changes in relationships with potential beneficiaries all mean a will written at 35 may no longer reflect your wishes accurately. A will review every 3–5 years — or immediately after any major life event — is recommended; (5) Care home costs: average residential care costs in England are approximately £900–£1,500 per week. At these rates, a person who needs 3 years of care will spend £140,000–£234,000 before they reach the £23,250 capital threshold at which local authority funding may apply. Understanding the system and planning appropriately before a crisis occurs is far more effective than trying to restructure assets after a care need arises; (6) Pension nominations: pension death benefits are not governed by the will — they are paid at the trustees' discretion guided by an expression of wishes. Out-of-date nominations (e.g., naming an ex-spouse) can result in the pension being paid in the wrong direction.

A will review after 60 is strongly recommended. The priority changes that may apply: (1) Executors: executors appointed when you were younger may themselves now be elderly, unwell, or in difficult relationships. Consider appointing a professional executor (solicitor, trust corporation, bank) as a backup or primary executor if your personal executors might not be able to act; (2) Guardians: if children named as guardians or beneficiaries are now adults, the guardian provisions may be irrelevant and the beneficiary provisions may need updating for the next generation; (3) New family members: grandchildren, step-children, or new partners may not appear in an older will. Specific legacies, residuary shares, and provisions for grandchildren's education funds can be added; (4) Mirror wills for couples: mirror wills (each leaving everything to the other, then to children) are the most common structure but create a survivor risk — if the surviving spouse remarries, the original children's inheritance may be at risk. A will trust (life interest trust for the surviving spouse, with children's remainder) protects the children's long-term share; (5) IHT efficiency: ensure the will is structured to use both the nil-rate band (£325,000) and the residence nil-rate band (£175,000). For married couples, both transfers can be made on the second death — a combined threshold of £1,000,000 for the right estate structure; (6) Specific legacies for sentimental items: now is the time to specify who should receive jewellery, artwork, family mementos, and other items of sentimental value. This avoids disputes between children and siblings during estate administration; (7) Digital assets: review your digital estate — online accounts, cryptocurrency, digital media libraries, and online businesses. Include a letter of wishes with login details (not passwords in the will itself — it becomes public) and instructions for each digital asset.

Inheritance tax planning for the over-60s should focus on both reducing the taxable estate now and ensuring the will is structured to maximise available reliefs: (1) Annual IHT exemptions — use them every year: £3,000 annual exemption (can be carried forward one year — so £6,000 in year 1 if unused in the prior year); £250 per person small gifts exemption (unlimited number of recipients — useful for grandchildren); gifts on marriage (£5,000 to child; £2,500 to grandchild; £1,000 to any other person); normal expenditure out of income (IHTA 1984 s.21 — regular gifts from surplus income; must not reduce the standard of living; no limit — but must be regular and from income, not capital). These are immediately exempt from IHT on the date of the gift; (2) Potentially exempt transfers (PETs): larger gifts become PET exempt after 7 years. Taper relief reduces the IHT charge on gifts made 3–7 years before death. The 7-year clock starts when the gift is made — starting gifting earlier captures more of the taper relief window; (3) Residence nil-rate band (RNRB): worth £175,000 per person (2026/27). Available when the family home (or a share of it) is left directly to lineal descendants (children, grandchildren). For couples, both RNRBs can be claimed on the second death — giving an additional £350,000 threshold. Tapers £1 for £2 above a £2m estate. Downsizing addition (IHTA 1984 s.8FA): if the property has been sold or downsized, the full RNRB may still be available; (4) Trusts: a discretionary trust in the will (with children as beneficiaries) can prevent an IHT charge arising on the first death where assets exceed the combined NRB/RNRB. A lifetime discretionary trust can shift assets outside the estate (2-year charge on entry if value exceeds NRB; but no further IHT for 10 years); (5) Life insurance in trust: a whole-of-life policy written in trust pays out to the trust (outside the estate) to fund the IHT liability on death. The premium is a regular payment (potentially covered by the normal expenditure out of income exemption). Useful for estates where the main asset is illiquid (property, business).

Care home fee planning is one of the most important — and most misunderstood — aspects of estate planning for the over-60s: (1) The means test threshold: when a person is assessed as needing residential care, they contribute to the cost from their own assets until their capital falls below £23,250 (2026/27). Below this threshold, the local authority contributes. The family home is disregarded in the means test if a spouse, civil partner, dependent child, or qualifying relative is still living in it; (2) Why early planning matters: assets above £23,250 are expected to be used for care before local authority funding kicks in. A care home costing £1,200 per week uses £62,400 per year. Three years of care could consume £187,000. Planning ahead — while healthy — allows legitimate structuring; (3) Deliberate deprivation: the local authority can look back at asset transfers made to avoid care fees (no fixed time limit). If the motive at the time of transfer was to avoid care fees, the local authority can 'notionally' include the asset in the means test even if it has been given away. Gifts made for genuine family reasons (not to avoid care) are generally not caught; (4) Protective property trusts: a life interest trust in the will can protect the deceased spouse's share of the home from the surviving spouse's care fees assessment — the survivor has the right to live in the property but does not own it outright, so it may be excluded from their means test. Specialist advice is essential for this structure; (5) Lasting Power of Attorney for care fees planning: if capacity is lost before arrangements are in place, an LPA attorney (not a Court of Protection deputy) has the flexibility to manage assets in the donor's best interests — including making gifts (with OPG guidance). An LPA is therefore a prerequisite for any care fee planning strategy; (6) NHS Continuing Healthcare (CHC): a person with a primary health need (not just a social care need) may be entitled to fully-funded NHS CHC — the NHS pays all care costs. The NHS Continuing Healthcare assessment is free. If CHC was wrongly denied before death, the estate may have a retrospective claim.

Pension death benefits and state benefit entitlements are areas where over-60s often have out-of-date records: (1) Pension expression of wishes: defined contribution (DC) pensions and SIPPs are not governed by the will. They are paid at the trustees' discretion, guided by an expression of wishes (also called a nomination form). Review and update the expression of wishes immediately for any pension where: the nominated beneficiary is an ex-spouse or former partner; a nominated beneficiary has died; new dependants or grandchildren exist who should benefit; your wishes have changed. Expressions of wishes should be reviewed every 2–3 years regardless; (2) Defined benefit (DB) pension nominations: occupational DB schemes typically pay a lump sum (death-in-service or commutation) at the trustees' discretion. The nomination form guides the trustees. Check the nomination with the scheme administrator — many people discover their nomination is decades out of date; (3) State pension — new state pension: if the claimant dies before taking their state pension, there is no transferable 'pot' — the new state pension (post-April 2016) is not transferable. However, a surviving spouse or civil partner may be able to claim an extra state pension element based on the deceased's NI record (transitional provisions apply). Contact the Pension Service (0800 731 0469) to investigate this entitlement; (4) Pension Credit and other means-tested benefits: if the surviving spouse's income drops significantly after their partner's death, they may become entitled to Pension Credit (the minimum income guarantee for those over state pension age). Check entitlement at gov.uk/pension-credit or via Citizens Advice; (5) Pension IHT from April 2027: HMRC has announced that most pension pots will be included in the IHT estate from April 2027. This is a significant change that makes pension nominations for IHT planning far more important. Consider reviewing strategies with a financial adviser before the change takes effect.