Worried about Inheritance Tax? You need specialist Estate Planning Lawyers
Have you made sufficient provisions to secure your assets for you and your family? With the help of our highly specialist estate planning lawyers, you could create a tax-efficient plan to ensure that everyone is provided for in the future.
Inheritance tax is often the most common concern, but there are other considerations which you will need to consider to create a robust and workable solution for your family.
Our estate planning expertise
Our family wealth planning team includes solicitor, Elizabeth Webbe, a Full Member of STEP (the Society of Trust and Estate Practitioners is the leading worldwide professional body for accountants and specialist wealth mangement lawyers). Elizabeth has particular specialist experience of cross border family wealth planning issues – representing clients with financial assets abroad, as well as those who who don’t have a UK domicile and/or those UK nationals in relationships with non-UK nationals. She can help you create a lasting legacy through strategic succession wealth planning.
For FREE initial advice on the phone about wills, inheritance tax or any other aspect of estate planning, simply call our Lawyers on FREEPHONE 0800 1404544 for an initial no strings attached conversation.
Inheritance Tax Update – November 2024
The October 2024 budget extended the current freeze in the IHT threshold until 2030, despite recent levels of inflation. That and other changes to inheritance tax is expected to increase the total of IHT raised by more than £2bn, i.e.more than 20%. And the changes made in the October 2024 budget have led economists at the Institute for Fiscal Studies to predict that a huge 55% more estates could be liable to pay inheritance tax by 2030 compared with 2023/4.
Don’t take any chances – contact our team for your specialist inheritance tax planning advice.
Making a will
This is the most important step you can take to help your family. By drafting a will, you will ensure that when you die, your assets will be handled according to your personal wishes.
As well as making the whole process much easier for your family, a legally binding will can also guarantee that your assets will be managed in the most tax-efficient way possible.
Other benefits of writing a will include:
· Setting out where you want your money to go to
· Minimising your inheritance tax liability
· Naming executors who will arrange your affairs when you die
· Appointing legal guardians for your children
· Ensuring your personal items go to the right people
· Establishing trusts and charity donations.
Far from being set in stone, wills can change with your personal circumstances, so it is advisable to revisit them when you get married or divorced, when you have children or grandchildren, when you retire and when you can receive an inheritance. In fact, the UK government recommend that everyone has a will and review it regularly, especially after one of these important life events. And you may be surprised how cheap a comprehensive will properly drafted by an experienced lawyer can be.
If you decide not to make a will, things can get very messy when you die. The court will divide your estate according to the rules of intestacy. Under these rules, only married or civil partners and some close relatives will be able to inherit and even then there are set limits on how much they inherit.
If you make a will which is not legally valid, the intestacy rules decide how the estate will be divided up.
Click here to read more about Making Your Will
Estate Planning and Inheritance Tax
With the right advice, you can plan accurately your estate’s inheritance tax liability. That means you can pass on the maximum amount of assets to your family.
The rules around inheritance tax often change, with Chancellors setting out new thresholds and adjustments during their budget announcements. This is important for everyone and particularly if you are a business owner, or if you hold assets overseas.
And the amount of inheritance tax raised by the government continues to rise year-on-year. A HMRC report dated April 2024 confirmed that income from inheritance tax from April 2023 to March 2024 hit £7.5 billion, up from the previous year.
That is why you need the expert advice of our estate planning lawyers who will understand the current situation, so that your plan is kept up to date and legally compliant. Our inheritance solicitors can recommend the best way to ensure that your estate is protected by making the most of tax reliefs, allowances and exemptions.
Click here to read more about how our highly specialist Inheritance Tax Planning Solicitors can help you
Take advantage of trusts
Setting up trusts is a highly effective way of managing your money, property or investments when you are gone. Usually associated with providing for children, trusts can be used to carry out your wishes concerning a range of other purposes.
By placing assets into a trust, you are effectively putting them under the control of an appointed person or group of people known as trustees. These will then manage the trust, according to your precise instructions, after your death.
Common reasons for setting up a trust include:
· Passing on assets to children, particularly those under the age of 18
· Funding education, such as university fees
· Providing for vulnerable loved ones
· Making provision for children/partners from previous relationships
· Managing personal injury compensation
· Reducing inheritance tax liability
· Protecting assets from third parties (creditors, former partners etc).
Click here to read more about Trust Creation.
Click here to find out about the difference between a Revocable and an Irrevocable Trust
It is important to realise, however, that just setting up a trust is only the beginning. That trust needs to be properly administered.
Here at Bonallack & Bishop, we are regularly appointed as professional Trustees, when the settlor (the name for the person who sets up the trust initially) does not have the right person to help out with with long-term trust administration.
Click here to read more about appointing our Professional Trustee Solicitors
Succession planning
If you have a thriving business and a young family, you may be concerned about who will benefit from your wealth and who will manage your business and family assets.
Succession planning aims to plan for all eventualities, so that you can pass on your wealth in an orderly and controlled fashion. With some professional advice, you can draw up a way to move safely your wealth on to future generations.
The plan can cover your personal and also your business interests. For example, you could arrange for your family to continue to own your business, while hiring an experienced manager to ensure its success. This way your family can continue to benefit financially, while your business and your employees have a secure future.
Succession planning can cover the following areas:
· Setting out what your family will inherit
· Explaining individual responsibilities and how to manage assets
· Minimising inheritance tax
· Dealing with overseas assets
· Choosing how to hand over control of your business and assets
· Charitable donations
· Planning for when you are unable to handle your own affairs
· Appointing professionals to control your business interests.
Estate planning for care home fees
Paying for care homes can be an enormous drain on a family’s resources. You can give yourself peace of mind by planning ahead, so that everything will be taken care of, while making sure there will still be something to pass on to your family.
If you need to go into a care home, the local authority will do a financial assessment to see if you qualify for state assistance. If your assets exceed £23,500, you will not receive any help, so you will have to pay the care costs, which start from around £2,500 per month.
The amount of money paid can quickly become eye-watering, which can make a huge dent in your overall estate. It is common for homes to be sold to pay for care, which leaves little left for the next generation.
It is advisable to plan for care home fees by understanding what the rules are around state funding. You can then structure your will, including your spouse or partner, so that you can protect your inheritance for your family.
There are also different ways to own your home with your partner, so that you can stay in your home when your partner needs to move into a care home.
Click here to read more about Long Term Care Funding or call our specialist estate planning lawyers today
Lasting power of attorney
Planning for the future is not just about what happens when you die. If you are involved in an accident, suffer an illness or just getting older, you may become mentally incapable of managing your own affairs.
In these circumstances, it is vital that you have in place a lasting power of attorney (LPA) which can be used to detail the decisions your nominated attorney(s) might make on your behalf. LPAs must be signed whilst you are mentally fit, and then need to be registered with the Office of the Public Guardian.
There are two kinds of LPA, one covering your property and financial affairs and the other dealing with health and welfare issues. They are complementary.
The main thing to remember about LPAs is that they are important for people of all ages. Do not leave it too late. If you are deemed mentally incapable of running your affairs, your assets will be frozen, then it will be up to a court to decide who handles your affairs. With an LPA you can decide exactly who you trust to manage your affairs for you, if you cannot.
Our wills and probate lawyers advise all of our clients to to make sure that they have a lasting power of attorney in place – and it is absolutely essential if you run your own business.
Click here to read more about Lasting Powers of Attorney
Living wills
Otherwise known as advance decisions, living wills give you the opportunity to set out your wishes concerning allowing or refusing medical treatment.
A living will become important if you are unable to communicate your decisions, for example if you are injured in an accident or suffer a serious health problem. It will allow you to refuse medical treatment, even if this could lead to your death.
This document is legally binding, so your loved ones must follow your instructions. This makes it vitally important that you discuss your wishes with your family. It is also necessary to discuss the matter with a healthcare professional, ideally your own doctor, who can advise you on potential risks based on your medical history. They can then add your wishes to your medical notes.
Like all the plans we have discussed here, you should regularly review your living will so that it accurately reflects your current situation. Our specialist estate planning lawyers regularly help clients with living Wills.
Click here to read more about Living Wills.
