Estate Planning

Estate planning involves determining how an individual’s assets will be preserved, managed, and distributed after death or in the event they become incapacitated.
Top 100 Financial Advisers Members 2020

Planning tasks include making a will, setting up trusts and/or making charitable donations to limit estate taxes, naming an executor and beneficiaries, and setting up funeral arrangements.

Our in house team can arrange for a simple will to be drafted or work with your Solicitor of choice. Get in touch to discuss Will writing. A will is a legal document that provide instructions on how an individual’s property and custody of minor children, if any, should be handled after death.

Various strategies can be used to limit taxes on an estate, from creating trusts to making charitable donations.

Inheritance tax is perhaps the most disliked of all taxes. People having worked hard and paid income tax and capital gains taxes throughout their lives are then subject to perhaps the heaviest tax of all, upon their death.

There is no wonder clients wish to reduce or even avoid paying ‘death duties’. Inheritance tax is considered a voluntary tax, because with the right planning the tax can certainly be reduced and even avoided.

Inheritance Tax (IHT) is often a complicated subject that can leave family members and loved ones paying significantly more in tax than necessary. Our financial advisers will explain how to help your children inherit more and give them the best future possible. We will work with you to ensure your hard work passes from one generation to the next.

What is inheritance tax?

Inheritance Tax (IHT) can apply to the worldwide assets of UK citizens. However not all of your estate is taxed, only that above the prevailing Nil Rate Band Allowance and Main Residence Nil Rate Allowance. The Nil Rate (NRB) Allowance is currently £325,000 per individual so a married couple can potentially benefit from £650,000 of joint exemptions.

The main residence nil rate allowance starts in April 2017 at £100,000 per individual and rises to £175,000 by 2020.

The cost of Inheritance Tax is 40% on all taxable assets above these thresholds making Inheritance Tax potentially the largest tax demand your children will ever face.

Writing a will

A will is a legal document created to provide instructions on how an individual’s property and custody of minor children, if any, should be handled after death. The individual expresses their wishes through the document and names an executor that they trust to fulfill their stated intentions. The will also indicates whether a trust should be created after death. Depending on the estate owner’s intentions, a trust can go into effect during their lifetime (living trust) or after their death (testamentary trust).

The authenticity of a will is determined through a legal process known as probate. Probate is the first step taken in administering the estate of a deceased person and distributing assets to the beneficiaries. When an individual dies, the custodian of the will must take the will to the probate court or to the executor named in the will within 30 days of the death of the testator.

The probate process is a court-supervised procedure in which the authenticity of the will left behind is proved to be valid and accepted as the true last testament of the deceased. The court officially appoints the executor named in the will, which, in turn, gives the executor the legal power to act on behalf of the deceased. Get in touch to arrange a meeting with our in house Will writer.

Using life insurance in estate planning

Life insurance can serve as a source to pay Inheritance Tax and expenses, fund business buy-sell agreements, and fund retirement plans. If sufficient insurance proceeds are available and the policies are properly structured, any income tax on the deemed dispositions of assets following the death of an individual can be paid without resorting to the sale of assets. Proceeds from life insurance that are received by the beneficiaries upon the death of the insured are generally income tax-free.

Estate planning is an ongoing process and should be started as soon as an individual has any measurable asset base. As life progresses and goals shift, the estate plan should shift in line with new goals. Lack of adequate estate planning can cause undue financial burdens to loved ones (estate taxes can run as high as 40%), so at the very least a will should be set up—even if the taxable estate is not large.