Estate Planning Over 70 UK (2026): The Complete Action List

A Lasting Power of Attorney (LPA) can only be made while the donor has mental capacity. The Mental Capacity Act 2005 requires the donor to understand, retain, use, weigh, and communicate the decision to make an LPA. Once capacity is lost — due to dementia, stroke, brain injury, or any other cause — it is too late to make an LPA. The ONLY alternative is a Court of Protection Deputyship, which takes 6-12 months, costs £1,500-4,000 or more, and places your affairs under court supervision indefinitely. At 70, the statistical risk of cognitive decline rises significantly. Dementia affects 1 in 6 people over 80 in the UK. There is no reliable way to predict when or whether decline will occur — the safe approach is to make LPAs now, while there is no doubt about capacity. TWO LPAs are needed: (1) LP1F (Property and Financial Affairs): covers bank accounts, investments, property sale, bill payment, income collection, tax returns. The attorney can use this immediately from OPG registration unless restricted to capacity-only use. An unrestricted LPA allows the attorney to help with day-to-day finances while the donor still has capacity — often valuable even before capacity is formally lost; (2) LP1H (Health and Welfare): covers care home placement, daily care arrangements, medical treatment, life-sustaining treatment (if expressly authorised). This LPA can ONLY be used when the donor lacks capacity for the specific decision in question — not while the donor has capacity. It includes the option to authorise the attorney to consent to or refuse life-sustaining treatment, which the donor must actively opt in to. TIMELINE: OPG registration takes 8-20 weeks. Do not wait. A diagnosis of early-stage dementia does NOT automatically mean capacity has been lost — many people with early dementia retain full testamentary and decisional capacity — but the window to act safely narrows. The Golden Rule for solicitors (Kenward v Adams [1975]): when taking instructions from elderly clients, obtain a contemporaneous medical assessment of capacity. If a GP or geriatrician confirms capacity at the time the LPA is made, that LPA is far less vulnerable to a later challenge.

Care home costs are the single largest unplanned expense that can erode an estate in the 70s and 80s. Average care home fees in England: £800-1,200/week (residential); £1,000-1,500/week (nursing). A three-year stay at £1,000/week = £156,000. Key estate planning considerations: (1) MEANS TEST: local authority care is means-tested. Property is included in the means test if: (a) you live alone; (b) there is no qualifying co-occupant (spouse, civil partner, dependent relative, or co-occupant over 60). If your property IS included, you pay for care until assets fall below the lower capital limit (£14,250 — below which local authority pays in full) or upper capital limit (£23,250 — above which you pay full fees in England). If your property IS NOT included (spouse/CP still living in it), the local authority cannot force a sale; (2) DELIBERATE DEPRIVATION: giving away your home specifically to avoid care home fees is treated as deliberate deprivation of assets under the Care Act 2014. The local authority can include the value of the gifted asset in the means test as if you still owned it. There is no safe 7-year rule for deliberate deprivation — local authorities can look back many years. It must be possible to show the gift was made for genuine reasons (e.g. family support, IHT planning) and not primarily to avoid care costs; (3) DEFERRED PAYMENT SCHEME: if your home is included in the means test but you cannot sell it quickly, the local authority can make a deferred payment — a legal charge against the property. You (or your estate) repay when the property is eventually sold; (4) IHT INTERACTION: money spent on care home fees reduces the estate — and therefore the IHT bill. IHT is only charged on the estate that survives. There is no IHT planning opportunity here specifically, but the financial drain of care fees should be factored into estate projections; (5) PLANNING OPTIONS: long-term care insurance; equity release to fund care; reviewing tenancy structure of the family home (joint tenants vs tenants in common); LPA in place for attorney to manage finances during care; will provisions for the surviving spouse if one partner goes into care while the other stays in the family home.

The Residence Nil-Rate Band (RNRB) is an additional IHT allowance available when a residential property passes to direct descendants on death. Key rules for 70+ planning: (1) AMOUNT: £175,000 per person. Combined with the standard NRB of £325,000, a single person can potentially pass £500,000 tax-free. A married couple (both NRBs and both RNRBs transferred) = up to £1 million IHT-free; (2) CONDITIONS: (a) the deceased must have owned a qualifying residential property (their main or former home); (b) the property passes to a direct descendant — children, stepchildren, grandchildren (including adopted, foster, and step-); (c) applies to property passing through the will or under intestacy or through a trust from the will; (3) TAPER ABOVE £2 MILLION: the RNRB reduces by £1 for every £2 by which the net estate exceeds £2 million. At £2.35 million the RNRB is eliminated entirely. The taper is applied before death — it catches large estates and means the £1 million threshold is only available for estates under £2 million. For estates over £2m, professional tax advice is essential; (4) DOWNSIZING ALLOWANCE: if the deceased downsized (or sold and moved to a care home) after 8 July 2015, and the property they owned at that point would have qualified for RNRB, they can still claim a Downsizing Addition — the RNRB they would have claimed on the larger property. The sale proceeds (or equivalent value) must have been retained in the estate; (5) PRACTICAL STEPS AT 70+: (a) Ensure your will leaves the family home to direct descendants or through a qualifying trust (immediate post-death interest or bereaved minor trust); (b) If you have downsized, ensure the Downsizing Addition is claimed on the IHT400 — it is easy to miss; (c) If the estate is above £2m, consider whether gifts (PETs), charitable legacies, or pension planning can reduce the estate below the taper threshold; (d) Check the will — if it leaves everything to a surviving spouse, the RNRB is preserved for the second death under the transferable RNRB rules (IHT402 claim).

From April 2027, unused DC pension funds and lump sum death benefits will be brought into the estate for IHT purposes under Finance Act 2024. This fundamentally changes the estate planning calculus for anyone with significant defined contribution pension savings: (1) BEFORE APRIL 2027: DC pension funds are held on trust, outside the estate for IHT. A £500,000 DC pension passes IHT-free. Expression of wishes directs the trustees who to pay (not legally binding but almost always followed). IHT advantage: zero; (2) FROM APRIL 2027: the unused pension fund will be included in the estate for IHT. The pension trustees will be responsible for reporting and paying IHT on the pension death benefit. The beneficiary receives the balance after IHT. This ends a significant planning advantage; (3) ACTION BEFORE APRIL 2027: (a) DRAW DOWN: consider drawing down and spending pension funds (or making PETs/gifts) before April 2027 to reduce the IHT exposure — but balance against income tax on drawdown at marginal rate; (b) USE THE PENSION FOR CARE COSTS: if care home fees are expected, using pension funds (rather than estate assets) to pay them may be tax-efficient — pension drawdown is taxable income but reduces the future IHT charge; (c) REVIEW EXPRESSIONS OF WISHES: after April 2027, nominating beneficiaries will still affect distribution but the IHT treatment changes. Some people will revise their nomination strategies; (d) LIFETIME GIFTING: using excess pension income as 'normal expenditure out of income' (IHTA 1984 s.21) — unlimited exemption for regular gifts out of surplus income — is one of the most valuable strategies available at 70+; (4) DB PENSIONS: defined benefit pensions continue under the employer scheme rules — lump sum death benefits covered by expression of wishes; dependent's pension to surviving spouse/CP and qualifying dependants. Less affected by the April 2027 change but still worth reviewing; (5) ALSO CHECK: death-in-service benefit if still working; existing nominations for old employer pensions.

A will made or reviewed in your 70s needs to address circumstances that may not have existed when an earlier will was made: (1) REVIEW AND UPDATE: if you have an existing will, review it against current circumstances — divorce; remarriage; children's changed circumstances; grandchildren; business interests; asset changes; beneficiaries who have died. A will made 10-20 years ago may no longer reflect your wishes; (2) EXECUTOR SUITABILITY: an executor named years ago may now be elderly themselves, in poor health, or estranged. Appoint executors who are younger, capable, and trusted. Consider appointing a professional executor or co-executor if the estate is complex; (3) FAMILY HOME PROVISIONS: if you are widowed, the family home likely needs to go to children/grandchildren for RNRB purposes. Ensure the will directs this explicitly. If you have a partner but are not married, they cannot benefit from the RNRB transfer — consider whether marriage would be beneficial; (4) BLENDED FAMILIES: if this is a second marriage with children from a first relationship, a life interest trust ensures the surviving spouse has security while protecting children's inheritance. Without one, the surviving spouse could renegotiate the estate entirely; (5) GRANDCHILDREN: consider including grandchildren, particularly if your children are financially secure. Grandchildren can inherit via per stirpes provisions or direct gifts; (6) LETTER OF WISHES: a non-legally binding letter of wishes alongside the will allows you to explain the thinking behind distributions, provide guidance on personal items, and give context that helps executors and beneficiaries understand your intentions; (7) FUNERAL WISHES: state whether you want burial or cremation. Executors are not legally bound by funeral wishes in the will but they carry moral weight; (8) DIGITAL LEGACY: include a digital legacy inventory or at minimum a letter of wishes covering digital accounts, online banking passwords location, and cryptocurrency holdings; (9) MARRIAGE REVOKES WILL: if you are considering remarrying, note that marriage revokes any existing will (WA 1837 s.18). Make a new will with contemplation of marriage wording (WA 1837 s.18(3)) before the ceremony or immediately after.