Estate planning involves structuring your affairs so that your estate passes to your intended beneficiaries in the most tax-efficient way after your death. It involves more than just a valid Will (although this is important) and can utilise options such as lifetime gifts and family trusts. Issues such as inheritance, capital gains and income tax are also considered. Estate planning allows you to detail your wishes regarding how your estate will be managed and divided on your death. The recent increase in property value means that more people will fall under the inheritance tax boundaries. Talk to our specialist lawyers for help and assistance on all aspects of estate planning. We can guide you the whole way through the process to make sure the arrangements suit your personal needs and requirements.
How does estate planning work?
Ensuring that you have a valid Will in place is vital to good estate planning. This ensures that your wishes can be correctly followed after your death. Lasting Powers of Attorney can also be relevant, especially for finance and property, which allows you to pass a variety of decisions onto someone else who acts on your behalf. It is also possible to set up a trust to manage your money or other assets on behalf of one or more beneficiaries. There are various trusts that can be used and it is advisable to take legal advice on which is most suitable to your needs and requirements.
Estate planning is useful not only for an individual’s personal needs but also for business succession planning. Again, by making sure you have taken expert legal advice in this area you can ensure that your business is protected in the future.
Good estate planning can also help in relation to mitigating inheritance tax liabilities. There is an existing tax-free threshold of £325,000 known as the Nil-Band rate after which beneficiaries must pay inheritance tax at 40% the value of the assets. The threshold can be raised to £650,000 for married couples. In addition to this, there were a number of changes made in 2017 including a Residential Nil-Rate Band being introduced for estates up to £2 million. It is being phased in until 2021 where it will reach the band limit of £175,000. Married couples can transfer between them their rate making it worth £350,000. This means that couples can pass £1 million in assets between themselves by 2020 without paying any inheritance tax.
Can I gift my estate to family and friends?
It is possible to gift some of your wealth to family and friends during your lifetime in order to reduce inheritance tax liability. After seven years it is no longer considered part of your estate for tax purposes when you then die. If you die between three to seven years after making the gift then there is a sliding scale of relief. You can also gift up to £3000 each tax year without this being added to the value of your estate (the annual exemption) as well as for certain other exemptions, such as gifts to charities or political parties or for wedding gifts up to £1000.
Contact our Estate Planning Solicitors, Alderley Edge, Cheshire
Our specialist lawyers offer a straightforward estate planning service. Our clients have varying value estates and we can tailor the planning to the size and needs of your estate. We have a range of associate experts who offer a range of services to complement the advice we offer.
Once a plan has been initiated it will be reviewed on a regular basis or when changes are made to legislation and regulation. Estate planning is important to anyone who owns a business to make sure that continuity is guaranteed should you not be available.
Call now on 01625 460 281 for a no-obligation consultation from one of our expert lawyers. Alternatively, you can complete our online enquiry form.