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Does your Estate Planning Pass the Test?

It is never too early to plan your estate. If it is large, it could be exposed to inheritance tax at 40%, and if it is small, advance planning can help you ensure that your assets will go to your chosen beneficiaries. Currently only 5% of estates have a liability to IHT.

Making a Will
Estate planning begins with the following decisions:

  • Who will inherit your assets?
  • When should the recipients receive them?
  • What limitations will be placed on the recipients?

A Will should also stipulate who is to be your minor child(ren)’s guardian. Although making a Will makes your decision legally binding, the Will can be amended any time you change your mind.

Where should you begin?
Start by asking yourself the following questions.  Every ‘no’ answer indicates an area where estate planning issues should be addressed.

  1. Have you made a Will?
  2. Has your will been safely lodged so that others can  access it after your death?
  3. Does your Will name a guardian for your children if both you and your partner die while they are still in their minority?
  4. Have you considered how to fund the inheritance tax liability?
  5. If you die suddenly, will your executors be able to  locate all your records easily?
  6. Do you have medium-term and long-term financial objectives?
  7. Do you know the present value of your estate?
  8. Are you comfortable with the executor(s) and trustees  you have selected?
  9. Have you arranged your affairs to take advantage of the  NIL rate band and the inheritance tax exemptions?
  10. Are you sure you have the right type and amount of  life assurance?
  11. Have you considered a trust to prevent assurance proceeds from being taxed as part of your estate?
  12. Have you considered making gifts to family members that  take advantage of the inheritance tax and capital gains tax exemptions and reliefs?
  13. Are you sure your estate plan is up-to-date and takes  into account all your personal wishes and all your potential tax saving strategies?
  14. Have you considered how inheritance tax will affect your business?
  15. Do you know what will happen to your business if you die?
  16. Do you know that business assets can be given away without your having to pay capital gains tax?
  17. Do you know how to give away business assets free  of inheritance tax?
  18. Have you considered the use of trusts in estate planning?
  19. Do you know the advantages of an accumulation and  maintenance trust?
  20. Do you know the intentions of relatives with substantial estates?