If you’re starting to think about estate planning but you’re not sure where to start, our Wills, probate and estate solicitors could help you. Get in touch to learn more.
Estate planning is when you set out all your assets and decide who you would like these to go to when you pass away. It’s a way for you to provide instructions on how your belongings should be distributed, while taking into account inheritance tax payable, legal fees and any other costs.
Some of the assets you might consider when estate planning include:
This can make things much easier for your loved ones, as they’ll have a clear plan to follow when you’re gone. When people die without an estate plan or a Will in place, it can lead to family disputes and costly legal battles. So it’s best to avoid this if you can.
Inheritance tax is usually paid on your estate – including your money, possessions and any shares you hold – when you pass away. It will also need to be paid on gifts or trusts that are made in the seven years before your death.
This can all sound quite morbid. But it is important to think about, as the amount of inheritance tax applied will ultimately determine what your beneficiaries – such as children or grandchildren – receive from your estate.
The total value of your estate will have a large impact on the amount of inheritance tax your executors pay. If your estate is worth more than £325,000, inheritance tax will be applied to anything over this amount.
For instance, if your estate is valued at £400,000, tax will apply to the £75,000 above the threshold. The standard inheritance tax rate is 40%, so in this example £30,000 would be taken out of your estate (40% of £75,000).
It’s worth noting that if you leave more than 10% of your estate to charity, the inheritance rate will be reduced to 36%. This might not sound like much, but it could make a significant difference to the final inheritance tax bill.
Although many people wish they could, you can’t avoid inheritance tax completely. But even if your estate is over the threshold, there are certain circumstances where you can pass on assets tax-free. Some examples include:
We understand the rules around inheritance tax can be confusing. But part of a solicitor’s role is to help you plan your estate in a way that reduces your tax burden. So you’ll have the reassurance of knowing your loved ones will benefit as much as possible from your estate when you’re gone.
Our Wills, estates and probate solicitors are specialists in this area. They can help you navigate the process of estate planning so you won’t be going through it alone.
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Whoever you choose to handle the administration of your estate will be known as your executor. It’s important that you pick someone you trust to perform this role, as they’ll be responsible for making sure your wishes are carried out.
Most people will choose family members as executors, but you could also ask a good friend. We would suggest using someone who is in good health, though, as this will make it more likely that they’ll still be alive when you die and will therefore able to deal with your affairs.
If you’d rather not go down this route, you could use a probate solicitor instead. They will take on the responsibility of handling your assets, and any legal fees will be charged to your estate.
Whoever you choose as your executor, make sure to let them know. It might be that the person you have in mind doesn’t feel comfortable, or does not have the time to fulfill the role. So it’s always worth checking.
As well as considering your physical and financial assets, you may also need to think about:
It’s not a legal requirement to have a solicitor help you with estate planning. But it is advisable that you speak to an inheritance tax specialist before putting your wishes into writing. They will use their experience to help you build a plan, so you won’t have to worry about excessive tax being applied.
We understand that you might have concerns about the cost of using a solicitor. But an increasing number of firms now offer fixed fees, based on the size of your estate. So you’ll have an idea of the cost involved from the very beginning of the process.
Our job is to put you in touch with reputable solicitors who will take some of the pressure off your shoulders. To find out if we could do this for you, get in touch with our friendly team. You can call us on the number at the top of the screen or start your enquiry online.
Learn about this area of law and what you need to know: