Protect and maximise your estate by speaking to the team at Tim Caldwell Financial Services. Based in Blaenau Ffestiniog, Gwynedd, we provide practical advice on estate planning as part of our financial services while taking all of your assets into account. Our experienced team also provide suitable guidance on inheritance tax planning to put your mind at ease.
When someone dies without a valid will, they become what is known as intestate and their estate must be shared out according to the rules of intestacy. As well as potentially causing beloved family members, friends, and organisations to miss out, it can also create headaches for those left behind to deal with the estate.
If you do not have a will, you should strongly consider making one. It might seem like a morbid task that you do not wish to consider, however ensuring you do will give you peace of mind knowing that your loved ones will be taken care of after you are gone.
There is no reason for writing a will to be time-consuming or costly. Wills and trusts can save you money too, as the more you plan now, the less inheritance tax will be payable on your death.
A LPA (lasting power of attorney) allows you to choose who you would want to manage your affairs. Without a LPA, there will be severe delays and substantial costs as well as a loss of control to a person (your deputy) that you do not know as well as ongoing costs. Without a LPA, your assets will be frozen and loved ones will have to use their own funds to make the application.
Trusts have been used for hundreds of years to protect family wealth and to make sure that it remains within your family ‘bloodline’ for many generations to come. A family trust can mitigate or completely avoid the need for probate (saving on average about £8,000) and avoid many other threats to passing wealth down to your chosen beneficiaries.
If set up at the right time and for the right reasons, a family trust can shelter property and other assets from means-tested benefits including long-term care. The law and rules are complicated and constantly changing, and you must take care to ensure that your planning complies with current and potential rules in the future.
Before your estate can pass to your loved ones, there are numerous threats that can prevent it from reaching its desired destination. From future relationships and disinheritance to the costs and delays of the probate process, there are many ways in which your children and grandchildren can see their inheritance diluted.
Other threats your beneficiaries may face include premature death followed by sideways disinheritance, divorce, financial issues, or their own Inheritance tax problems. These can all be avoided with proper estate planning completed at the right time and for the right reasons, protecting and preserving your wealth for future generations.
It is important to remember that when you die, your estate could be subject to inheritance tax (IHT) if it is worth more than the inheritance tax threshold. With careful planning, you can reduce the amount payable, however it can be complex.
The inheritance tax threshold is £325,000 per person, so married couples and civil partners can have a joint estate of £650,000 before any IHT is payable. This threshold is likely to stay in force until April 2018 though an additional allowance covering family homes only will be phased in from April 2017, starting at £100,000 per person. In most cases, tax is currently payable at 40% of everything over the IHT threshold.
There are various ways you can reduce the size of your taxable estate. It is important to think a long way ahead, as some aspects of IHT planning need seven years to take full effect. At Tim Caldwell Financial Services, we can help you to put suitable arrangements in place.
Probate is a term commonly used when talking about applying for the right to deal with the affairs of someone who has died. If the deceased has a will, the executor or administrator will apply for a grant of probate.
The grant is a legal document that confirms the executor has the authority to deal with the deceased person’s assets (property, money, and belongings). This is called 'administering the estate'. The executor uses the grant to show they have the right to access funds, sort out finances, and collect and share out the deceased person's assets as set out in the will.
If the deceased did not leave a will, a close relative of the deceased can apply to the probate registry to deal with the estate. In this case, they can apply for a 'grant of letters of administration'. If the grant is given, they are known as 'administrators' of the estate.
Like the grant of probate, the grant of letters of administration is a legal document that confirms the administrator's authority to deal with the deceased person's assets.
Inheritance tax planning, will writing, trusts, and taxation are not regulated by the FCA.