The bucket list your family wish you had written…
Whilst most people will plan for more interesting activities than estate planning during their life, such as their next holiday, moving house or having children, many people are failing to plan for when they are no longer around. There are many things which could be considered to ensure that matters are as straight forward as possible during this difficult time and that your assets are passed onto the people who you would like to benefit in the most tax efficient way. There are, therefore, the matters that your family would like you to address whilst you have the chance; when you are gone it will be too late!
Further to our previous article on the 4th October the following list gives you the next 5 top estate planning tips which you may wish to consider:
6. Give away surplus income
This is a very underused relief and can be extremely valuable. If you are fortunate enough to have surplus income which you give away every year, it can immediately reduce the value of your estate subject to IHT. Unlike many other gifts, there is no requirement for you to survive seven years for the value to fall outside your estate.
7. Review your Retirement Provision
Pensions are a great way to save for retirement due to the tax relief available on contributions. However, following the recent changes made to pensions, it could be more tax efficient to pay for any expenses out of your savings whenever possible, before dipping into your pension fund.
8. Take out a life insurance policy
A life insurance policy could pay your IHT bill when you pass away, avoiding the need for your beneficiaries to dispose of family assets to pay your IHT liability. Life insurance policies should be written in trust so that the pay-out does not form part of your estate and, therefore, subject to IHT.
9. Lasting Powers of Attorney (“LPAs”)
LPAs enable you to appoint a person or people now who will look after your finances and your welfare when you are unable. LPAs enable your chosen Attorney to immediately make decisions on your behalf without the need to apply to the Courts, which is a time-consuming and costly procedure. A general power of attorney is not as effective as a LPA as it is revoked when you lose mental capacity.
10. Discuss your plans with your family.
Finally, it is important that you discuss your plans and your intentions to your family and friends so that they can understand your wishes and intentions to help avoid any arguments after your death. You should also let them know where your original Will is held along with contact details for all relevant individuals, such as your solicitor, accountant and executors. Don’t overlook records for online bank accounts which your executors might not otherwise know about.
If you would like to discuss the options available to you, please contact Rachael Dronfield.
