6 top tips for successful estate planning

 26 May 2021
6 top tips for successful estate planning

Estate planning can seem daunting, but it’s actually just about taking stock of what you have now, what you’ll need in the future, and what you want to leave to the next generation. It also does not mean you have to be mega wealthy to benefit from some straightforward planning.

Most of us can probably jot down those kind of figures as a ballpark right now. We probably know who we might like to leave items or gifts to when we die, and what kind of lifestyle we’d like in retirement. What we don’t have in our heads is the nitty gritty detail of how to achieve this, how to make it tax efficient, and what paperwork needs to be completed.

Our top tips will guide you through what to think about, and why. Then you can talk to your estate planning advisor with confidence from a basis of knowledge rather than guesswork. Together, you can then create a plan that’s as individual as you are!


Tip #1: Write your Will

If you’ve made a will - well done! It’s estimated that 57% of UK had not written a will at all. Your Will simply lays down how your assets will be divided in terms of how much goes to whom. If you die without a Will, the government will decide this, and people you might want to benefit may not do so. So it makes sense to write a detailed Will that makes everything clear, especially if your assets or your family circumstances are more complex.

You can write a DIY will, but it’s far better to seek financial advice first and to use a professional will writer, to ensure your wishes are crystal clear and able to be carried out. You should also regular review your Will to ensure it reflects your current situation and wishes - a lot may have changed in the last 16 months…

Tip#2: Inheritance Tax planning

As the saying goes, "Nothing is certain except for death and taxes." Sadly, Inheritance Tax (IHT) is therefore a double certainty - unless you plan for it in advance. Otherwise, your family could be hit with a large tax bill just when they are trying to cope with your death. A financial advisor can help you plan ahead to reduce IHT as it can be complex, and the rules are quite strict.

Tip#3: Lasting Power of Attorney (LPA)

An LPA is one of the most important legal documents you need in life - and one of the most misunderstood. An LPA appoints people (known as attorneys) to help manage your affairs and take important decisions on your behalf should you become incapacitated through illness or lose your mental capacity to manage your affairs. The important thing to remember is that it is ready and waiting to be ‘switched on’ if you need it, but ‘dormant’ when it’s not required.

Tip#4: Gift assets during your lifetime

You don’t need to wait until your demise to help out family members with gifts or assets. While the annual threshold for gifts is quite modest (currently £3000 a year), there are ways to maximise what you give away and how., including gifts made seven years before your death being free from IHT. Again, the rules are a little complex, so it’s always better to seek financial advice before making a gift. See the Gov website for more details on IHT and gifts.

Top#5: Talk about Trusts

Trusts are a tax efficient way to ‘ring fence’ assets and monies for the future generations, and ensure they are paid direct to the beneficiary rather than through your estate. Professional advice is vital when setting these up, to ensure they comply with regulations and offer the maximum benefit for your circumstances.

Tip#6: Take professional advice

OK, we know we’ve said this already throughout this blog. Taking professional advice really is essential to ensure your estate planning is properly documented and you are making the most of allowances and tax benefits available to you.

Financial advisors can provide details on investments and other ways to preserve and increase your assets over time. In contrast, an experienced estate planner will be able to give you the complete holistic overview that maximises the effectiveness of your comprehensive estate plan across all areas of your life.

Need some help with estate planning?

Call us at Panthera Estate Planning to discuss your situation and circumstances in your initial online consultation. If required, Paul Hammond can offer professional financial planning services in person.

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