Estate and Inheritance Tax Planning

Estate planning is, ultimately, a plan of action for the transference of your assets to your next of kin, whilst you’re alive, and after you’ve passed on. When crafted correctly, your financial estate plan can protect your possessions and wealth for generations to come, ensuring your hard-earned assets are passed down as you would like.

To make sure your estate is efficiently protected in the future, from things like Inheritance Tax or divorce settlements, you need an expert financial planner by your side.

What is Estate Planning?

Firstly, your estate comprises all your assets, such as:

• Property
• Investments
• Savings
• Vehicles
• Antiques
• Life insurance policies
• Pensions
• Debt

Your estate plan should detail, with absolute clarity, how you wish your assets to be managed after your death.

In this digital age, the definition of ‘ownership’ and, therefore, an ‘asset’ has become much more complex. As part of your estate, you may also want to include digital assets, such as a website, social media posts, family-photos computer file, or emails.

With so many possessions acquired over a lifetime, it’s essential that you implement a strategy to stop your assets – whether they’re monetarily or sentimentally valuable – from falling into the wrong hands, or becoming subject to Inheritance Tax.

Why is estate planning important?

Life doesn’t always go the way we think it will, and, without an adequate estate plan, your assets can fall victim to circumstance.

Family dynamics have become more flexible over the last century, with unmarried families, remarriage and blended families becoming the norm across the population. On top of this, many of us have multiple pension pots, from various careers, and numerous bank accounts and savings accounts to consider. 

Our increasingly complex lifestyles may seem manageable when those decisions are first made, but they can result in unexpected obstacles later down the line, especially when estates are under scrutiny from the government and the law.

For example, many people naturally want their assets to remain in their bloodline. However, if an estate plan is not comprehensive, children can inherit wealth, and then be subjected to a divorce later on in life, and part of the wealth could disappear for the benefit of the ex-spouse.

Another unfortunate example is bankruptcy; in this scenario, part of the wealth could be taken by the creditors, if it’s not protected effectively.

How to Create an Estate Plan

The first step towards creating an estate plan is to list your assets. You might find it helpful to categorise your assets into ‘tangible’ and ‘non-tangible’, and even into value categories, such as ‘monetary’ and ‘sentimental’. This will give your financial estate planner an idea of what your estate is potentially worth.

Next, you want to think about whom you would like to benefit from your estate. If you have children in the family, how would you like to support them in the future? Who do you trust to manage your estate in the future? Are there any charitable organisations you would like to donate part of your estate to, or gifts you would like to leave?

These are all questions that can be discussed with your financial planner, who can advise you on the best way to ensure that your loved ones, and your legacy, come out on top. 

Once you have an overview of who and what you would like to be covered, there are four key pillars of an effective estate plan that work symbiotically to fulfil your wishes:

How can our financial estate planners help you?

At Wills, Tax & Trusts, our team of expert financial planners are equipped with decades of experience, knowledge, and success. We strive to channel those qualities into a bespoke service for every client, every time.

In helping you plan your legacy, we take into account your circumstances as an individual, a spouse, a parent, a businessman, or all the above, to find the best solutions for your situation. There are many strategies used in financial planning to ensure that our clients, and their beneficiaries, are protected from things like Inheritance Tax, divorce settlements, and creditors – it’s not a ‘one-plan fits all’. Each estate plan requires a unique approach to guarantee that our individual clients receive the right combination of techniques that will benefit them the most for generations to come.

We know that a person-centred approach is absolutely essential to your satisfaction, which is why we offer both in-person and online consultations to suit your schedule.

For a free, no-obligation initial discussion, and free quote, talk to one of our experts today on 0118 934 7920.

Estate Planning FAQs

What happens if I die without an estate plan in place?

If you die without making a valid will, one of the most important elements of estate planning, your estate will be shared out according to rules of intestacy. Under these rules, only a spouse, or civil partner, and some close relatives, are able to inherit.

Under the rules of intestacy, the spouse/civil partner can inherit:

• All the personal property and belongings of the person who has died;
• the first £270,000 of the estate;
• or, half of the remaining estate.

If there is a surviving spouse/civil partner, a child only inherits from the estate if the estate is valued at over £270,000. If there are two or more children, the children will inherit in equal shares.

However, if there is no surviving spouse/civil partner, the children of the intestate person will inherit the whole estate. This applies however much the estate is worth. If there are two or more children, the estate will be divided equally between them.

How much does estate planning cost?

The cost of estate planning greatly depends on the complexities of your individual circumstances.

The main factors that will determine the cost of your bespoke estate planning are:

• The complexity of your estate;
• the number and type of assets you have;
• whether you have/are considering international investments.

Do I need a financial planner to help organise my estate?

It’s important to remember that tax laws and regulations constantly change, and it’s part of a financial planner’s profession to keep up with those changes, and strategise around them accordingly.

An expert can help you navigate the complexities of the law, ensuring that your estate plan is tailored to your specific needs, incorporating the latest information and strategies.

Who should make an estate plan?

Anyone in the United Kingdom with assets of substantial worth, or business interests, should make an estate plan. As taxes, legal fees, and other expenses can affect your assets, it’s important that you protect them, strategically, by transferring them to the appropriate person, at the appropriate time.

If you have children, are married, or have other dependents, an estate plan is essential for the financial stability of their futures.

Likewise, if you own a business, your business will form part of your estate, and, therefore, your estate plan. It’s vital that you prepare a transference strategy to ensure your business’ continuity and success.

How long does the estate planning process take?

Depending on the size of your estate, the complexity of your assets, and any disputes among potential beneficiaries, the drafting of an estate plan can take from a few weeks to a number of months to settle.

In addition, you must take into consideration the amount of time you’ll need to speak with your financial estate planner, accountant, and solicitor. Before anything is signed off legally, each specialist will need to run through your financial facts with a fine-tooth comb. This is to make sure that you are adhering to the law, whilst taking advantage of the right strategies to best serve your interests.

Do life insurance policies play a role in estate planning?

Yes, life insurance policies play an important role in estate planning because they can provide liquidity to cover care costs, estate taxes, and other expenses, whilst providing beneficiaries a financial safety-net.

Contact our Trusts and Financial Estate Planning Experts

Our many clients throughout Berkshire live confidently in the knowledge that their assets, and the future generations of their families, are protected. Start your journey towards a legacy you can control, today, by contacting a member of our financial planning team on 0118 934 7920.

Or, fill out the form below, and we’ll give you a call at the earliest opportunity.