Why is it important to think about Estate Planning?
We all know that having a Will is important and everyone needs to have one. It not only sets out your wishes after your death. It also helps you to understand better your current and future estate, which could be worth more than you ever imagined.
If this is the case, you will need to think carefully about estate planning and how to make your Will as tax efficient as possible, by finding practical and intelligent solutions to plan for and mitigate inheritance, capital gains and income tax alongside other liabilities.
After working and saving hard for years, it’s frightening to think that on your death, inheritance tax (IHT) of 40% will be payable if your estate is over the IHT threshold. So, if you think this applies to you, consider utilising inheritance tax reliefs and exceptions with considered estate planning.
Your estate plan could involve providing gifts including lifetime and annual gifts as well as gifts to charity. You can also consider trusts to pass on assets to other people including children or invest in regulated financial and pension products, as long as you seek the right independent advice.
Estate planning also helps to protect your assets from 3rd parties after your death.
For example, you can make sure that if your partner decided to remarry, their new spouse could not inherit from your estate. You can ensure your assets are safe against long term care fees and from troubled dependents who you feel may squander any money left to them because of addictions or future divorce and financial issues.
You can provide for any family members or friends if they have a disability without risking their eligibility for means- tested state benefits and put plans in place to protect any business you may have and the people you employ.
Thinking about what happens when you die is always a difficult task, but effectively planning your estate is really something that everyone should consider if their estate will be worth more than the IHT allowance, £325,000.
It’s not just about mitigating tax. It’s about making the most of your assets, protecting it where needed and perhaps using it to benefit others, ensuring that during your lifetime, you are doing all you can to leave a well thought out, lasting legacy.
If you need to write or update your Will, create a trust or you want professional advice about dealing with the affairs of someone who has died, you can speak to our Will, trust and probate solicitors.