Protect Your Assets: Your Guide to Estate Planning
Estate planning is essential for everyone, regardless of your age and income. It is all about ensuring you have control over your future even after you’re gone. Whether you own a home or want to make sure your children can be cared for, having an estate plan in place can give you peace of mind that both you and your loved ones will be protected.
In this post, we will take a look at what estate planning is and how you can prepare one for yourself.
What is Estate Planning?
Estate planning involves organising how your assets, such as property, finances and personal belongings, will be managed and distributed after you die. It also ensures that someone you trust can make decisions on your behalf if you lose capacity or become seriously ill. This not only protects yourself but also helps ease any stress from your loved ones during the difficult time.
Your estate plan ensures that:
- Your assets are distributed according to your wishes
- Your children and dependents are cared for
- You choose who makes decisions on your behalf if you lose capacity
- You minimise potential tax burdens on your estate
Without a plan in place, your estate could be subject to intestacy, meaning your assets will be distributed according to legal government rules. This means your specific wishes may not be followed and your estate will go through probate court. Not having a plan can cause unnecessary stress and conflict for your loved ones, along with several legal costs.
At Hartley Fowler, we help our clients understand the financial and tax implications of their estate decisions. Contact us today to find out more about how we can help with inheritance tax, trusts and succession planning advice.
Key Components of an Estate Plan
There are several documents you need to have to ensure that your estate plan is complete. These documents make sure that your wishes are followed to help you and your loved ones feel confident in all decisions made.
Wills
A Will is the most important part of an estate plan. Having a Will in place ensures that all your assets and possessions are correctly distributed, your funeral preferences are made clear and allows you to appoint guardianship of minor children. It can help support strategic inheritance tax planning to structure your estate in the most efficient way possible.
If you don’t have a Will in place, your estate will be divided according to legal guidelines, meaning your assets wouldn’t go to people of your choice or some loved ones may be unintentionally left out.
Trusts
Trusts are legal arrangements that can help protect your estate and control how your assets are used and distributed. They can be useful for:
- Providing for young or vulnerable beneficiaries
- Managing inheritance for children until they reach a certain age
There are several trust types, such as discretionary trusts and bare trusts, that have their own set of tax implications. Expert financial guidance can be essential for understanding these. We help our clients recognise the most suitable trust structure based on their goals and ensure that any relevant tax returns are handled accurately and on time.
Lasting Powers of Attorney
There are two types of Lasting Powers of Attorney (LPA):
- Health and Welfare LPA – allows someone you trust to make medical and care decisions on your behalf, such as medical treatment and living arrangements.
- Property and Finance LPA – allows someone you trust to manage your finances, e.g. pay your bills or handle your property.
If you lose capacity, this document ensures that someone else can make important decisions on your behalf.
Beneficiaries
Some of your assets, like life insurance policies and pensions, will pass directly to named beneficiaries. We can help you review your pension and beneficiaries to ensure that there is no unnecessary tax.
Healthcare Directives
This document allows you to specify certain medical treatments you do or don’t want if you become unable to communicate your wishes. Healthcare directives are not a legal requirement, but they can help to provide clarity for your loved ones and medical professionals.
Creating Your Estate Plan
Getting started with your estate planning can feel overwhelming, but it doesn’t need to be. Our expert team is here to help you and guide you through the process.
Bringing a financially-focused approach to estate planning, we can help you:
- Identify and value your assets – This can include properties, business interests, pensions, and investments.
- Forecast tax liabilities – Such as inheritance tax or capital gains tax on business assets or second homes.
- Implement tax-efficient strategies – This involves things like gifting and lifetime transfers.
- Gain professional advice – We can help you organise your financial affairs and maximise the value of your estate. Working closely with legal professionals, our team ensures all documentation is properly drafted and aligned with your financial plan.
- Review your plan regularly – Your estate plan should be reviewed every few years or after any major life events. We can assist you in ensuring that your plan aligns with your financial goals.
Take Control of Your Future
Estate planning is one of the most important financial decisions you can make. Our team of experienced accountants and tax advisors can provide you with financial advice tailored to your needs. Contact us today to take the first step towards protecting your assets.