The practicalities of estate planning and why everyone needs a plan. Find out why making a will is so important and how inheritance tax can impact what you leave behind.
Key Points
- Estate planning is important. It removes any dispute about what to do with your estate and provides clear guidance for your loved ones.
- Setting up a will is the first step to take when estate planning. With a will, you get to decide who your beneficiaries are and how much money they receive. Next, make a list of all your assets and work out how much they add up to. If your assets total more than £325,000, think about how inheritance tax may impact what you leave behind.
- You don’t have to be rich to benefit from estate planning. But you should investigate taking professional advice if your estate is large or complex.
Give us a call today on 01482 298543 or use the form on our contact page to discuss your needs or make an appointment.
What is estate planning?
When you’re considering how to pass on your wealth when you die, you’ll want to make sure it goes to the people you choose. This is estate planning. It helps make sure that everything you own is passed on in the way you want it to be.
You don’t have to be rich to benefit from estate planning. Anyone who has savings, owns property, has a pension or even a collection of Dinky toys can plan who they want to receive their estate when they die.
Your assets
Your estate is made up of all the assets you own. It includes:
Why estate planning is important
Estate planning is important because you can make it clear in advance who receives what when you die. You can also put plans in place if you become unable to manage your own financial affairs as you get older. This removes any dispute about what to do with your estate and provides clear guidance for your loved ones.
If you don’t have a plan in place for what happens to your estate when you die, you could find that the Law determines who gets what. This is called being ‘intestate’. It means that you died without making a will. This may mean that your wealth doesn’t end up with those you choose.
An example of this is unmarried partners. If you die without making a will, your unmarried partner is not entitled to automatically inherit your wealth. Instead, your estate will go first to any legal spouse or civil partner (even if you’re separated). Then children and their descendants will inherit if there is no legal spouse.
You could also find your estate is landed with a large inheritance tax bill if you don’t take steps to plan ahead. Estate planning can help minimise the amount of inheritance tax you may need to pay.
The estate planning process
The estate planning process involves looking at all aspects of your finances. You will need to make a comprehensive list of everything you own. And then decide who you want to leave it to.
As part of the process, you may need to draw up various legal documents. At this stage it’s a good idea to speak to a professional, such as Albany Wills who make sure everything is recorded correctly.
Estate planning is also an ongoing process. As your life changes over time, you’ll need to review your plan.
For more information, give us a call today on 01482 298543 or use the contact form here.
