If you’ve never heard of an estate plan before, you might be wondering what it is, never mind why you need one. Put simply, it’s a financial plan that helps you get everything organised. Of course, in practice it’s often not that simple. Here’s my whistle stop guide to estate planning – hopefully it’ll give you some things to think about.
It’s more than a will
If you’ve made a will you’ve already taken an important step in making sure your family know what your wishes are when you’ve gone. Estate planning goes a bit further than that. I always recommend that you create a Lasting Power of Attorney as well. You can find out more about those here.
Depending on the value of your estate your family may need to pay inheritance tax. The estate planning process allows you to work out how much that might cost and what the current rules are. What you decide to do next depends on what assets you have and how inheritance tax applies to them. There are steps you can take to make sure that your estate is organised in a tax efficient way, which means you have more to leave for your family. (Don’t worry, it’s all completely legal.)
Looking after your family
The main point of creating an estate plan and getting everything organised is so that you can look after your family, even when you’re not here. We’ll talk you through everything you need to think about. Some of the questions we’ll ask you might bring up issues you’ve never considered before. One of the key things to look at is whether your family will have money available to pay the bills until probate has gone through.
Whatever plan you make, it’s always worth creating a plan B. There are complications that can come up which might change who inherits. These could even mean that one side of your family inherits while the other is cut out completely. A thorough plan can prevent this from happening so your wishes are still carried out.
Remember to review it
Once you’ve made an estate plan it’s important to review it regularly. This gives you the opportunity to make sure that you still want the same things. Your circumstances might have changed since you created your plan. You may find that your original plan has it all covered, but reviewing it means you can alter the plan if you need to.
Of course, it isn’t just your circumstances that could be different. The law can change too. Rules on inheritance tax have changed a couple of times in the last ten years. If you own a family home you can now pass this on without paying as much inheritance tax, but you need to have your estate organised in the right way. An estate planner will be able to take you through any changes that have happened since your last review. That way you can make decisions knowing you’ve got all the facts.
Do you need to create an estate plan? Get in touch using the form below or call us on 0116 380 0752.
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