Effective estate planning can be the key to a (relatively!) stress-free life for your family after your death. It is also the best way to keep your assets outside of the estate.
Dying without having an estate plan in place is not to be recommended if you are interested in the future security of your family or keeping money where you want it to be. It can cause all sorts of problems for your surviving family members. They may have to deal with probate court and pay more taxes on your estate than you may have intended. An effective estate plan can help avoid all of that.
The First Steps in Estate Planning
The first step in creating an effective estate plan is to determine what assets you have and what you want to do with them after you die. Do you want to leave them to your spouse? Children? A charity? Once you know who you want to inherit your assets, you can start working on transferring ownership of those assets.
Estate planning in the United Kingdom can be a complex process, but there are several ways to effectively use annual allowances; the so-called ‘7 year-rule’ (Potentially Exempt Transfers or PETs), placing assets in trusts where appropriate, making use of pensions and life insurances, and making use of assets that qualify for Business Property Relief or Agricultural Property Relief to minimise taxes and maximise wealth retention.
Assets in trust can also be used to minimize taxes on an estate. Trusts can be structured in a variety of ways, but they all allow for the transfer of assets to beneficiaries without incurring any immediate tax liability.
Pensions and life insurance policies can also be used in estate planning.
Contact rhw’s Wills. Trusts and Estates team for full legal and financial advice in Estate Planning. email or call 01483 302000
