None of us like to think of a time when we are no longer here but wouldn’t it be reassuring to know that as and when that time comes all of your hard earned cash is going to benefit your loved ones and not end up lining someone else’s pockets.
Whether it be the taxman, the local authority, a marriage breakdown, a new marriage or a bankruptcy claim, there are so many threats to your wealth which can mean that your loved ones might not end up with what you wanted them to.
Going through an estate planning exercise can help to minimise these threats and ensure, as much as possible, that your wealth is protected for future generations.
The first and most important point is to ensure that you have a valid will that properly reflects your wishes. Take advice with regard to an existing will to ensure that it is still valid and achieves what you want it to. Changes in legislation and your personal or family circumstances can soon render a will obsolete.
Quantify your estate, both now and taking into account possible changes in the future and take advice with regard to your potential IHT liability and how that can be reduced. Consider who your dependents are and who you would want to benefit, both immediately and in the longer term.
Consider what steps you have put in place to ensure that any dependents are catered for and if you have taken out life assurance ensure that it is written in trust. Also consider a spousal bypass trust for pension death benefits and ensure that you have made nominations so that these remain outside of your estate.
If you make gifts absolutely, either in your will or during lifetime the recipient is free to do what they wish with that money and it will form part of their own estate which means that if they die it will be subject to IHT, if they divorce it could go to their ex-partner, if they remarry it could go to their new spouse or his or her family, if they go in to care the local authority could claim it and if they become bankrupt it could go to their creditors.
Gifts into trusts can help to protect assets from many of these threats, they can also ensure that you direct who any remaining funds go to on the death of the immediate beneficiary, for example if you want to benefit your spouse for their lifetime but then your children after your spouse has died.
If you need advice to start getting your financial plans in order please do not hesitate to get in touch.