ESTATE AND SUCCESSION PLANNING
The death of a loved one is a difficult, upsetting and stressful time for all of those left behind. Robust estate and succession planning can take away much of the financial worry and uncertainty, leaving those left behind the chance to grieve and come to terms with the loss.
Estate Planning, Inheritance Tax Planning and Taxation Planning are not regulated by the Financial Conduct Authority.
Whilst death sadly comes for us all at some point, there are many things we can do to ensure that your financial affairs are dealt with smoothly and that you provide for those you leave behind.
They say that nothing is certain but death and taxes and whilst that may be true of death, good estate planning, can ensure that you do not pay any more tax than you are legally required to.
Proactive estate planning helps to ensure that we not only have enough money for the rest of our lives, but that our remaining assets are passed on to our loved ones, as tax efficiently as possible.
We can help you negotiate the maze of legislation, tax allowances and tax efficient investments to formulate a plan for your estate.
Factors we need to consider
WHAT
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- What are the terms of your will and are these up to date and accurate?
- What would be the financial/taxation position on your estate if your will was executed now and what is the likely situation if the will was executed in future?
- What is the value of your current estate and what allowances would be used up in the event of your death? Would there be a potential inheritance tax liability as things stand?
- What pension allowances have been used and/or are forecast to be used throughout your working life? Are you at risk of breaching the lifetime allowance? Have you nominated beneficiaries within your pension? Are you in a position to make additional pension contributions, using existing savings, investments or surplus income? What is your attitude to utilising other types of investment, to benefit from specific inheritance tax exemptions/allowances?
- What gifts have you made and what gifts would you like to make throughout your lifetime? Are you making use of specific allowances regarding gifts?
- What is your attitude towards accessing capital or income from your estate, throughout your lifetime? Trusts can allow you to move capital outside of your estate, to various extents, however this can reduce or cease your access to those assets, depending on the type of trust.
WHEN
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- When did you take out your will and how often has it been reviewed? Have any changes to legislation affected your current plans/wishes?
- When did you make any specific gifts or when do you plan to make any gifts in future?
- When do you expect to receive any inheritances, which could significantly affect the value and planning required for your own estate?
- When will we pass away? As things stand, this is a question that none of us can really answer with a high degree of accuracy. Whilst none of us know how long we have to live, we can make some estimates as to our longevity, based on various statistics. Are you in good health and do you lead a healthy lifestyle? At what age did close relatives pass away? What do statistics tell us that the average longevity for someone of your age is now?
- When will you need to retain access to your assets until? Will you need access to the capital or just the income produced by those assets?
HOW
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- How would you like to protect any current inheritance tax liability?
- How do you anticipate that future expenditure (capital and income) will affect the value of your estate in over time?
- How do you anticipate that gifts already made and future planned gifts, will fall outside of your estate? Would you like to protect any tax liability relating to these gifts during the time that they remain a part of your estate?
- How will placing assets in trust affect your own financial position? Will you retain access to enough income and/or capital?
- How much can you afford to pay on a monthly basis towards protecting any inheritance tax liabilities on your estate?
So how do we approach this journey?
Identify your destination
This is perhaps the hardest part of estate planning. Whilst we know the destination we are planning for, the length of the journey will always be uncertain. Making some form of assessment of future longevity helps with the planning, however this can only ever be an estimation and any planning should take that into account, in its flexibility.
Where are you now?
The first thing we really need to do when assessing any estate planning, is to obtain the full picture with regard to the overall estate and any allowances used. This involves accurate valuations of all assets, identifying which would fall within the estate for inheritance tax purposes. This enables us to ascertain any inheritance tax liabilities that would exist at this point in time.
How did you get here?
Once we have the overall picture, it is important to understand how you arrived at this point. Recording details of previous gifts made and any previous trusts is vital, as these can all have an affect on future planning. If a spouse predeceases you, then you will have likely received some or all of their inheritance tax allowance and the amount of this allowance should also be factored in.
How can we get you there?
Once we have a good understanding your estate and any previous planning that you have put in place, we can discuss the options you have to ensure that your estate is as protected and as tax efficient as possible. This may involve moving assets into investments which either hold your funds outside of your estate, or which have specific exemptions when it comes to inheritance tax. Other options are to gift some assets away, to place those assets into trust for beneficiaries or to simply look at insurance to cover future inheritance tax liabilities.
Service stops
The simple fact that none of us know how long this journey is, means that regularly reviewing your position is essential, to ensure that your planning remains accurate and relevant. Add in the inevitable changes to your own estate over time and the ever changing world of taxation and legislation, then reviews backed up by robust cash flow modelling of your plans is vital.
Reviews
Contact
E: graham@woldsfinancialplanning.co.uk
T: 07980 568 407
A: 56 The Mile, Pocklington, York, YO42 2HG