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Estate Planning

Effective estate planning can reduce exposure of your assets to Inheritance Tax and also financial predators.

Do you know?

More options will be open to you, the earlier you plan for succession and estate legacy.

Wealth is rarely easily won, but it is all too easily put at risk if not carefully protected.

Your estate will be as unique as you are. Family businesses, property portfolios, savings, investments, overseas assets.

Life events such as births, marriages, death and divorce can all impact unprotected legacies.

This demands consideration of the full range of options available to enable your cash and assets to be protected and passed on as you wish.

Effective estate planning can reduce exposure of assets to threats such as divorce, separation and bankruptcy, and help to reduce tax liabilities for the second generation and beyond.

It is important your estate planning strategy aligns to your wishes and specific circumstances, such as the make-up of your estate.

Here to help

As experienced tax consultants, ETC Tax can advise on estate planning strategies designed to protect your assets and provide your family lasting benefits.

We will help you achieve a balance between maintaining access to your money while saving tax and safeguarding the level and treatment of your residual legacy through lifetime gifts, tax-efficient wills and the effective use of trusts and IHT exemptions.

Private and business circumstances are becoming increasingly complex, and with that the demand for effective estate planning that reflects these complexities.

This could entail providing for a spouse after death while protecting the interests of any children; reducing liability on the matrimonial home from care fees after the death of a partner/spouse; providing a protected inheritance to children; helping succession planning in family businesses.

We will work with you to understand your specific requirements, and build a plan to specifically meet those needs while ensuring compliance with HMRC requirements.

Do you have a question about estate planning?

Speak to one our Chartered Tax Advisers

Estate Planning FAQs

Do I need to make a will?

Critical to estate planning is making a will. Irrespective of your personal circumstances – whether you have children or not, are divorced, have overseas assets – the only way to ensure your wishes are carried out following your death is to make a will.

Dying intestate will leave your estate subject to the rules of intestacy which set out who will inherit and by how much. It leaves your estate open to standard IHT liabilities. It also creates additional cost and administrative burdens on your loved ones, as well as potential complications in relation to claims on your estate.

The sooner you take action the more options and the more favourable the options there are open to you. Gifting for example can be tax-free, provided the gift was not made in the seven years prior to the death.

What are the benefits of a family trust for estate planning?

Trusts can be used to protect some or all of your estate for future generations on your death.

They can provide peace of mind while real life unfolds and you and your loved ones face changes such as relationship breakdown, bankruptcy, creditors, future care fees.

You may wish to protect your assets for children from a previous relationship, or avoid paying IHT twice when passed on from your beneficiaries.

Trusts also offer a degree of privacy as they are private documents and not publically disclosed, unlike probated wills.

For example, where a child inherits a substantial sum, if inherited outside of a trust, in the event of the child divorcing, the inheritance may form part of the divorce settlement at a potential loss of 50% to the former spouse.

Under a family trust however, the inheritance can be recalled in full as a loan. This might remove the sum from divorce proceedings, to be later returned intact following divorce settlement.

In another scenario, following the death of one parent, the surviving parent – the beneficiary of their spouse’s will – remarries. The second parent dies, and their new spouse inherits the full sum by default. The children of the deceased parents may receive nothing.

In this instance had a trust been set up by the original parents, the sum would have been called back by the trust on the death of the second parent, ready for the children to enjoy full benefit and bypassing the new spouse.

Do you have a question about estate planning?

Speak to one our Chartered Tax Advisers

What is included in my estate?

Your estate will cover everything you own, including cash, investments, property and vehicles.

How can I make best use of IHT exemptions?

We can advise on making the best use of the available lifetime IHT exemptions, which include:

  • £3,000 annual exemption
  • normal expenditure gifts out of after tax income
  • gifts in consideration of marriage (up to specified limits)
  • gifts you make of up to £250 per person per annum
  • gifts to charities
  • gifts between spouses, facilitating equalisation of estates (special rules apply if one spouse is non-UK domiciled).

When should I start planning?

The earlier you can start to plan for succession and estate legacy the better. You will find there are more options open to you, allowing your more control over what happens to your estate on your death.

Once you have a plan in place, we recommend reviewing your estate plan every two years and in response to key life event such as marriage, birth of a child, divorce, house purchase.

What if I own my own business?

The establishment of Business Trusts as part of your overall estate planning framework is key to protecting your business for your family.

What was once an Inheritance Tax exempt asset via Business Property Relief, where replaced with cash following a sale, can suddenly attract 40% tax as it passes down the generations.

Common shortfalls include a total lack of bloodline protection planning, no controlled succession planning and the omission of additional legitimate tax planning.

What happens if I live abroad?

We are specialists in overseas implications of IHT planning.

When someone living abroad dies, the rules for paying Inheritance Tax usually depend on how long they lived abroad, whether their assets (property, money and possessions) are in the UK or abroad, and if their assets in the UK are ‘excluded assets’.

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