Modern Estate Planning: From Wills to Testamentary Substitutes

Date: 07 May 2025

Karen Jones

For generations, the last will and testament has played a vital role in estate planning, offering a structured way for individuals to set out how their assets should be distributed after death.

Yet in recent years, concerns have been raised over the effectiveness and efficiency of the probate process, prompting a shift towards alternative methods. As estate planning continues to evolve, understanding the benefits and drawbacks of both traditional and modern approaches is increasingly important.

High-Profile Case: George Michael’s Estate

One of the many recent celebrity estates that drew public and legal attention was that of pop icon, George Michael. His estate was engaged in public legal disputes and controversy, following his death in 2016. While his will itself was not the direct subject of a famous court case, the handling of his estate and who was excluded or included led to legal challenges, and significant media coverage. His estate was estimated to be worth around £97 million. Kenny Goss, George Michael’s former partner of over a decade, sued the estate, arguing that he had been promised financial support during their time together. He invoked the Inheritance (Provision for Family and Dependants) Act 1975, which allows people who were financially dependent on the deceased to make claims. Reports showed that a settlement was reached, but the terms were not made public.

Expert Insight: The Traditional Role of Wills

To understand the ongoing shift, it’s essential to first examine the traditional role that wills, and the probate process have played in estate planning. Joshua Rubenstein, Partner, National Chair, Private Wealth at law firm, Katten Muchin Rosenman, New York shares his thoughts. “For centuries, a last will and testament was the cornerstone of everyone’s estate plan, leaving directions (fully amendable prior to death) for who gets what, on what terms, and how taxes are paid. To safeguard against forgeries, there are strict procedures needed to prove – i.e. probate – in a court of competent jurisdiction, that the will is the valid last will of the testator. Those procedures vary from jurisdiction to jurisdiction, but they include that they will be in writing and signed by the testator in front of witnesses who attest that the testator declared it to be his or her will, had testamentary capacity, and was free from duress, and that the will was properly executed.”

The Rise of Testamentary Substitutes

However, as public attitudes and legal strategies evolve, new alternatives have emerged that challenge the dominance of the traditional will. Rubenstein says, “More recently, clients and advisors alike have voiced objections to the probate process, including that it is expensive, the courts are badly backlogged so there can be enormous delays, and ones wishes would become a matter of public record. Early ways of avoiding probate and preserving privacy, at least with respect to some of one’s assets, were life insurance and pensions, which passed by beneficiary designation, and jointly held property, which passed by operation of law. Today, however, dozens of new kinds of “testamentary substitutes” (the UK would call these Life insurance trusts and joint tenancies within estate planning) have arisen, which have the effect of making it possible to make almost any asset pass by beneficiary designation or operation of law. “  

While many clients still rely on traditional wills, there has been a noticeable shift toward more proactive and flexible estate planning strategies. This change reflects the growing desire for control over one’s estate while still alive. As Henry Wickham, Partner and Head of Ogier‘s estate planning, wills, and probate team, based in Jersey, Channel Islands highlights, “Some clients are interested in creating lifetime structures as this offers an opportunity for them to actively participate in the management and impact of their estate plans during their lifetime. This approach allows for adjustments as circumstances evolve and can reduce potential conflicts upon passing. This evolving trend speaks to the flexibility and customization that modern estate planning is increasingly offering.”

What Are Testamentary Substitutes?

To clarify, here is a brief explanation of what testamentary substitutes involve and how they function in estate planning. Testamentary substitutes are assets or arrangements that pass to beneficiaries outside of a will, meaning they do not go through probate. These are used in estate planning to simplify asset transfers and potentially reduce estate taxes or delays. Assets, in the USA, which can transfer based on named beneficiaries include life insurance policies and retirement accounts like IRAs and 401(k)s.

High-Profile Case: Michael Jackson’s Estate

Michael Jackson’s estate offers another example of how high-value wills and disputes can become entangled in the probate process. Michael Jackson’s estate included a significant stake in Sony/ATV Music Publishing, which was valued at $1.5 billion. Following his death in 2009, disputes arose over the validity of his will and the management of his assets. In 2024, the estate also sold a part of its music catalogue to Sony for a considerable sum. Michael Jackson’s 2002 will, which was discovered after his death, named John Branca an entertainment lawyer and a key figure in Michael Jackson’s business affairs for many years, and John McClain Artist and Repertoire executive, who was closely involved in Michael Jackson’s career, as executors. Despite the will being signed, relatives argued that it was not valid, citing concerns about Michael’s mental state at the time it was signed. There were also disputes over whether Michael revised the will before his death, with some claiming that there was a new will that would have changed the distribution of assets. However, the Los Angeles County Superior Court in California upheld the 2002 will.

Capacity Challenges and Lifetime Disputes on the Rise

Adding to the complexity of modern estate planning is the increasing prevalence of disputes not just after death, but during life. As Hannah Mantle, Partner in the Trust and Estate Disputes team at Forsters, notes. “One of the continuing trends we are seeing is claims arising from a long-term deterioration in capacity, whether of a deceased or a beneficiary. Where, previously, claims were more likely to have been to challenge a Will based on lack of capacity to make the Will itself, we are now seeing more estates where challenges are being made to lifetime gifts or settlements on trust. Sometimes these challenges have to be considered by the executors for the benefit of the estate as a whole, while on other occasions they are driven by one beneficiary or group of beneficiaries.” This reflects a broader shift in estate litigation, with capacity issues extending beyond the traditional confines of will validity. Mantle continues. “Equally, we are seeing more claims where a beneficiary lacks capacity following a deceased’s death, such that their needs are much greater than anticipated and a claim is required under the 1975 Act, or such that executors have to be alive to a risk of claims on behalf of an incapacitous beneficiary or claimant, where the usual limitation defences would not apply and could lead to claims being made much later than would usually be the case.”

These evolving patterns demonstrate the heightened need for careful, ongoing assessment during the lifetime of the testatorand for executors to be prepared for complex scenarios long after death. As lifetime estate planning gains popularity, it must also incorporate foresight into mental capacity risks, balancing autonomy, fairness, and legal certainty.

UK Perspective: Legal Reforms and Digital Wills

While the U.S. has increasingly adopted testamentary substitutes, the UK is also exploring reforms aimed at modernization, particularly through digitalization. Matthew Briggs, Partner in the Wills, Trusts, and Probate team at Berkshire-based law firm Boyes Turner, explains his outlook. “From a UK perspective, the wills and probate sector has been undergoing a significant transformation, shaped by modernisation efforts, the integration of digital assets, shifting attitudes toward estate planning and growing concerns over predatory marriages, particularly as incapacity rises in an ageing population.”

Briggs continues, “The Law Commission is set to release its final report and a draft bill on 16 May 2025, outlining recommendations for electronic wills and revisions to marriage revocation rules. These anticipated changes could reshape estate planning, introducing new safeguards while modernising outdated legal frameworks. Reforms under the proposed Wills Act 2025 aim to bring estate planning into the digital age, simplifying will-writing while tackling inefficiencies in laws dating back to the Victorian era. By facilitating digital wills, the reforms promise faster execution—but legal professionals will need to ensure that clients fully understand both the benefits and emerging risks of this evolving system.”

Briggs notes that digital legacies, from cryptocurrency holdings to social media accounts, are becoming integral to estate planning. The proposed introduction of secure online signatures and digital will storage could revolutionise how estates are administered. Yet challenges remain, particularly regarding authenticity and long-term access.

Navigating the Digital Frontier: Estate Planning Must Evolve to Address the Rise of Digital Assets

Brendan Udokoro, Associate in the Private Client & Family team at Howard Kennedy comments on the specialised world of crypto. “As a solicitor working in trusts and estates disputes, I see first-hand how the nature of estates and their assets, and the challenges around them, are becoming more complex.  Today’s estates often include digital assets, crypto currency and online investments.  With these modern assets comes uncertainty, complexity and an increased likelihood of disputes.  I believe this will only accelerate in the years ahead.”

“At present,” Udokoro continues, “if a person dies without leaving a Will, their digital assets will not be considered personal property and would not pass under the rules of intestacy.  The Property (Digital Assets etc.) Bill was introduced on 11 September 2024.  Members of the House of Lords concluded their further examination of the Bill on Wednesday 30 April 2025.  The Bill aims to provide clarity by establishing that digital assets can be property, even if they do not meet the traditional definitions of property established in case law. As clients increasingly accumulate digital wealth, this clarification could not come soon enough.  Digital assets often are not properly considered in traditional estate planning and are regularly left as an afterthought.  Often, families do not even know what digital assets exist until after death, accessing them can therefore be legally and technically complicated.”

Udokoro adds, “Looking ahead, I expect digital assets to feature in a growing number of probate disputes.  As their value and significance increases, so will the likelihood of claims involving issues of ownership or access to them.  My advice to clients is simple: treat digital assets with as much importance and thought as traditional assets.”

Predatory Marriage and Capacity Challenges in the UK

Legal professionals have also voiced concerns around vulnerability and capacity in estate planning, particularly regarding predatory marriage. Briggs warns that “under current UK law, marriage automatically revokes previous wills, unless explicitly stated otherwise, which can expose vulnerable individuals to coercion and financial manipulation. The Law Commission’s review may introduce safeguards to prevent automatic revocation in such cases, potentially reshaping inheritance law and requiring new estate planning strategies. Briggs concludes that, “These developments present both opportunities and challenges.”

Probate Delays and Their Impact in the UK

Issues with probate are not just theoretical, in the UK, systemic delays have had real consequences for families and estates. Rafael Singer, Private Client Consultant Solicitor at Summerfield Browne, with offices in London, Birmingham, Cambridge, Oxford and Leicester, discusses the challenges. “In the UK, the probate registry courts completely buckled a few years ago, hit by a triple whammy of austerity-related cutbacks; a move to a division between digital and paper applications that wasn’t entirely seamless, and the effects of Covid lockdown. Applications that once took around two weeks to process were taking months. The main impact of the delays was that properties couldn’t be sold, leading to unpaid inheritance tax, leading to interest on unpaid inheritance tax accruing. The dark irony, hopefully unintentional, was that this government mismanagement with the probate registry system was leading to higher increased revenue for the Treasury.”

Singer continues, “The assets that did not require probate, but paid out on death, were pensions (that are almost always held on trust by the pension provider) and life policies (which were often but not always held on trust by the provider). If the estate had these in place, then at least inheritance tax could be paid, even if it was only a portion.

“From an English law perspective,” Says Richard McDermott, Partner at Farrer & Co who specialises in UK trust law, wills, tax and estate planning. “The process of obtaining probate has been very challenging in recent years.  This is mainly because of significant delays at the Probate Registry, which processes applications for a Grant of Probate.  It had been reasonable to expect the Probate Registry to process an application for a Grant of Probate within 2-3 weeks, but the timeline ballooned to 6-12 months and sometimes much longer.  This in turn caused considerable stress and financial difficulty for bereaved families at an already difficult time.”

McDermott adds, “The delays began during and were exacerbated by the COVID-19 pandemic.  A subsequent Parliamentary enquiry concluded that the main cause was in fact a lack of skilled staff because many senior Probate Registry staff having left as part of a centralisation and digitisation project.  Thankfully the Probate Registry delays are now alleviating, but we are not yet out of the woods completely.”  

“While all this has knocked confidence in the probate process, there are, depending on the circumstances, ways of obtaining a Grant of Probate more urgently and we have been using these “fast-track” options whenever possible,” explains McDermott. “For example, a fast track limited form of Grant enabling the executors to complete the sale of a deceased’s property.”

Why Lifetime Estate Planning Matters in the UK

“I agree that the probate process in the UK has changed significantly in recent years, but for our clients, depending on the nature of their estate and the ownership of their estates, the probate process may be unavoidable,” Says, Clare Archer who is Partner and Head of the London private client team at law firm, Penningtons Manches Cooper. “It is necessary to demonstrate legal title, gain access to assets and ensure distribution to beneficiaries.” 

Archer continues, “The probate process can create very real difficulties for those who administer the estate (the personal representatives) where the liability and responsibility to pay the tax remains with them, but control of the assets does not. These problems may be exacerbated, for example, because of recent changes by the government to the inheritance tax on pensions. Under the anticipated new rules, the tax collection may rest with the pension provider but the effect of corrections in the estate and the designation of the nil rate band allowance between the various assets may mean the amount of the final inheritance tax liability is uncertain for some time, which may make the provider reluctant to release funds early.” 

Archers adds, “A well drafted validly executed will remains the cornerstone of any estate planning advice we provide to our clients; it ensures their wishes are reflected on their death and can minimise or avoid potential litigation amongst disappointed beneficiaries. We also advise clients, however, that detailed estate planning during their lifetime is vital. Such estate planning can prove as effective and important as the implementation of any “testamentary substitute” options in the US. Recent changes by the government, for example, to inheritance tax for farming and business sectors, as well as pensions and death benefits mentioned above, have also demonstrated the importance of lifetime estate planning for both tax and succession purposes.”

“Lifetime estate planning allows us to identify those assets which may form part of the probate estate including jointly owned assets and specific pension or death benefit plans. It can address the impact of probate upon an estate and allow us to advise clients on who inherits their estate and any necessary tax planning particularly for inheritance tax or capital gains tax purposes. It can result in changes of ownership structures or the passing of wealth down to new generations through, for example, gifts or loans of assets. Lifetime trusts may be created to enable this planning or alternative corporate structures utilised such as Family Investment Companies (FICS) to hold assets and determine their succession. Every estate is unique, and while a will remains a vital element of any estate planning exercise, it is never too early to start estate planning. This process can also bring its own complications. We always advise clients to identify the planning options relevant to them, and how they can be combined and calibrated to meet any specific requirements.” Concludes Archer.

The Role of Trusts in Maintaining Privacy

One strategy to address probate’s public nature and delays involves the use of discretionary trusts. Singer adds a thought on this topic, “Another issue with the wills and probate registry system is that, once processed, wills are a matter of public record. To circumvent this, testators can leave their estate on discretionary trust, which provides trustees with powers to decide who should inherit, how much and when. The testator can leave a non-binding letter of wishes which is not submitted and not a matter of public record. Provided that the distribution is within two years of death, the distributions are ‘read back’ as if they were what the will originally specified, with no adverse inheritance tax consequences. Although that ensures that the distribution is kept secret, it still requires the same probate process, with all the same potential delays associated with it.”

The challenges of Testamentary Substitutes

Despite their benefits, testamentary substitutes introduce their own complications. Rubenstein picks up the thread, “Testamentary substitutes have created their own set of problems, as if all assets pass to multiple people upon death, there is often no way to pay a decedent’s debts, administration expenses and taxes. Forgeries and undue influence are also harder to detect, and there is no fixed procedure for policing the integrity of registration of assets at the time of registration. Because testamentary substitutes lack a quarterback or central authority to oversee estate administration, increasingly planners are looking to a hybrid arrangement, using a simple will that gets probated, but which then pours entirely into an inter vivos revocable trust, so it too is freely amendable until death, but then after death, passes free from public scrutiny or court involvement and is administered on its own.” One of the key advantages is that assets placed in a revocable living trust do not go through probate upon the grantor’s death. Probate can be time-consuming and costly, and a revocable trust helps the beneficiaries bypass that process.

The complexity of transferring assets outside of the traditional will process often leaves room for future complications, particularly around ensuring the smooth transition of wealth across generations. Wickham warns, “As the divide in generational wealth becomes more pronounced, gifting during one’s lifetime has gained popularity. It’s crucial, however, to ensure that these transfers are structured correctly to withstand scrutiny and are not challengeable at the date of death.” This serves as a reminder that while gifting is an effective strategy, it requires careful planning to avoid future legal hurdles.

High-Profile Case: Nina Wang and Competing Wills

A dramatic case from Hong Kong underscores how high-stakes estate disputes can hinge on will authenticity. Nina Wang, was married to Teddy Wang, a Hong Kong businessperson and founder of Chinachem Group, a massive property development company. In 1990, Teddy Wang was kidnapped and never found. He was declared legally dead in 1999. His disappearance triggered years of legal battles over his fortune between Wang and her father-in-law. Teddy Wang’s father contested her claim, arguing she had forged a will. After years of litigation, the Hong Kong courts ruled in her favour in 2005, awarding her full control of the Chinachem fortune, worth billions. After her own death from cancer in 2007, another sensational court case erupted over her personal will. Two competing wills emerged, one from 2002, leaving most of her wealth to charity via the Chinachem Charitable Foundation, and one from 2006, leaving her entire estate to her feng shui master and spiritual adviser, Tony Chan. The Hong Kong High Court ruled in 2010 that the 2006 will was a forgery, and Tony Chan was later arrested and convicted.

A Shift Toward Hybrid Planning

The way individuals plan for the transfer of wealth is undergoing a quiet but significant transformation. While the traditional will remains a central pillar of estate planning, it is increasingly being complemented, or, in some cases, replaced, by alternatives designed to offer greater flexibility, privacy, and efficiency. Testamentary substitutes, digital solutions, and lifetime planning structures reflect broader societal changes, including a desire for more control and reduced bureaucracy, but these approaches are not without their challenges.

Alex Chung, Partner at Withers Hong Kong, offers insight into how high-net-worth individuals are embracing more proactive strategies in Hong Kong: “It is not uncommon for high net worth individuals in Hong Kong to put in place a simple Hong Kong Will and a lifetime family trust. However, unlike the United States where it is possible for the client to be the settlor/grantor and the trustee of his or her own revocable trust, in Hong Kong clients would typically appoint a professional trustee to act as trustee of the family trust. That way, as long as the trust has been funded with assets during the client’s lifetime, his or her family members who are beneficiaries of the trust could have access to the funds in the trust without having to worry about the lengthy probate processes. Other than probate avoidance, there can also be tax benefits for a client to set up a lifetime trust particularly in cases where some or all of the beneficiaries of the trust are resident in a high-tax jurisdiction like the United States.”

This strategy highlights the growing trend toward creating flexible, lifetime structures that can address probate and tax issues while offering more control over estate management. The approach is also effective in minimizing the risk of public disputes, which are a concern when probate proceedings are involved.

Beyond Documents: The Human Complexity of Cross-Border Estate Planning

“Beyond legal mechanisms and structures, real-world estate planning often runs into deeper human and relational challenges,” Says Clifford Ng, Managing Partner, Hong Kong of law firm Zhong Lun, “The concept of one will per person or even the intestacy laws of many jurisdictions do not contemplate estates and family members spanning different jurisdictions and the nature of people’s relationships nowadays.  Different jurisdictions may have different laws on who is entitled to what in different circumstances.  Wills will usually be a part of the planning because people will have some assets in their personal name even if they use other tools like trusts or insurance.  The question then is what other tools and how many wills make sense for them.”

Ng continues, “The trap for many people is that they think a will or a trust, foundation, different insurance products, family constitution, family office or whatever “product” can solve their family or relationship issues.  They don’t. They can play a role in disentangling people and issues but they do not resolve long-standing family grievances that only surface when the principal dies. Clients need to have heart-to-heart discussions with experienced advisors.  Ultimately, the parties should land on the simplest and most permanent solution possible which is explained to those who will be charged with dealing with it so everyone knows what to do and why.  Unfortunately, we sometimes see wills or other structures which actually upset relationships or turn up the temperature on simmering disputes among siblings. Almost every time, a new client would tell us in the first 5 minutes of our meeting that he or she has a very simple family and the assets are straightforward.  Two hours later, it is a very different story.”

From legal disputes to tax complications, the need for careful, informed planning, as we see, is greater than ever. As Rubenstein concludes, “These measures can end up in favour of the litigators. All unpaid creditors sue the estate, and the estate cross claims against the beneficiaries for clawback. It is not pretty.” As the system evolves, one thing remains clear: a thoughtful, well-structured estate plan, tailored to individual circumstances, remains the best safeguard for ensuring wishes are honoured and complications are minimised. Increasingly, legal experts recommend a combined strategy, using a simple will alongside a revocable trust, to provide both flexibility in life and discretion in death.

Subscribe to the Citywealth Weekly Newsletter to learn more about Private Wealth Management.