12 Jan How To Plan Your Estate, Protect Your Family And Secure Your Assets In Six Steps.
Robert France, Partner and Wills, Trusts and Probate solicitor at HRJ Foreman Laws Solicitors, talks about some of the ways we can help you begin preparing for your future, today.
1. Write your Will and name your beneficiaries
Decide what you want to happen to your estate in the event of your passing. You can appoint guardians to care for your children, leave a donation to a charity and choose your beneficiaries. Estate planning will help you safeguard your assets and provide financial security for your family.
It’s best to write your Will sooner rather than later. It’s not just something to consider once you reach pension age. There are several key moments in life when writing or updating an existing Will are important, such as after buying your first home, having a child, getting married or cohabiting.
2. Set up a Trust
We see many clients who are worried about care fees and want to know how they might protect their estate. The first step is to seek legal advice regarding the best way to protect your assets. Any deliberate attempts to avoid care fees can be challenged by the Local Authority, resulting in lifetime gifts or Trusts being recalled or set aside. Carefully drafted Wills can protect part of your estate against care fees, should the surviving partner or spouse require care later in their life. This can be achieved by creating a Trust, following the death of the first partner or spouse, that allows the survivor to enjoy the estate whilst protecting the capital value for the benefit of the next generation.
If you have young children, a Trust is also a great way to put funds aside for them to inherit when they come of age. A Trust can also be useful for a vulnerable beneficiary that you feel should have managed access to their inheritance or are unable to manage finances personally.
3. Seek advice about inheritance tax
There is an inheritance tax (IHT) threshold, known as the nil rate band (NRB), which protects the first £325,000 from tax. It is frozen at this amount until at least April 2028. Any part of the estate that exceeds this is usually chargeable at 40%. For married couples or those in a civil partnership, it is possible for the unused part of the NRB of the first spouse or civil partner to be transferred to their survivor, which will mean that up to £650,000 can pass free of tax, following the second death.
An additional allowance known as the Resident Nil Rate Band (RNRB) was introduced in April 2017. This allowance applies where your estate includes a property or did include a property in July 2015 or thereafter) and the estate or part of the estate passes to direct descendants. The RNRB is currently £175,000 and is also transferable between spouses and partners.
There are other IHT exemptions, such as charitable donations and gifts. However, it is important to seek legal advice before gifting, to ensure it is conducted legitimately. IHT can get complicated, but our Wills, Trust and Probate team are experienced and will be able to advise each client based on their personal circumstances.
4. Appoint Attorney’s under a Lasting Power of Attorney
There is an assumption that a ‘next of kin’ will automatically be allowed to make decisions for a loved one, but this isn’t always the case. By putting in place Lasting Powers of Attorney, you are providing legal authorisation for someone you trust to act on your behalf. Your Attorney can make financial or health and welfare decisions if you’re no longer able or lack capacity. For example, vulnerable people that have been self-isolating during Covid-19 were able to rely on their Lasting Power of Attorney to pay bills and go to the bank on their behalf.
5. Name an executor of the estate
An executor is responsible for handling your estate and distributing your estate after your death. We are seeing more and more clients asking us to act as their executor, as they want a neutral third party to administer their assets on their behalf. We are happy to do this, or to support a family member that has been appointed as an executor. We will also work closely with you if you need help to manage the probate process. This is the legal process for dealing with the estate of someone who has died. A Grant of Representation is usually required before the assets can be passed onto any beneficiaries. This is called a Grant of Probate if there is a Will.
6. Seek expert estate planning advice
We always like to chat with our clients first – in person, by video call or phone – to get to know you better and understand your circumstances. We’re able to pick up on key details about your life that enables us to find the best solutions for you. We can address any concerns you may have, answer questions, and offer valuable insight to make estate planning easy. You never know what’s around the corner, but with our support and advice, we can help you protect your family, by securing your assets and planning your estate.
If you need to make an appointment with one of our solicitors’ email info@hrjforemanlaws.co.uk or call Hitchin 01462 458711, Welwyn Garden City 01707 887 700.