Starting a conversation about the ‘Elephant in the Room’
With over 30million people in the UK without a Will, there are so many reasons that it is one of those things that gets put off, moves down the ‘To-Do List’ and sometimes just never ever gets done BUT it doesn’t have to be the difficult conversation that many expect!
Many of us put off making a Will because we don’t want to tempt fate or presume that those we want to take care of will be able to inherit our assets anyway but that isn’t always the case.
Where there is no Will, the Rules of Intestacy kick in and this means that you lose control over who you would want to inherit and this is chosen for you…
So, if you are one of those 30million that have been putting off making a Will, or have a Will that may need updating, why not take a look at some of these considerations…
Who do you want to inherit your Estate?
We all would like to think we are immortal, right?
Unfortunately, that isn’t the case and so we should have consideration for who we would want to benefit from everything we have worked hard for, when we are no longer around.
This will depend on your circumstances and is likely to change at different stages of your life, depending on your relationships, children, grandchildren, nieces and nephews, perhaps even godchildren or second marriages.
The value of your Estate is calculated by totalling everything that you possess, own or have an interest in at the date of your death (this will include property – residential, buy-to-lets, commercial and holiday homes), money, bank accounts, savings, ISAs, Stocks & Shares, Cars, Jewellery and personal possessions.
Any liabilities or debts will then be deducted from this total, including mortgages, loans, utility bills, credit cards plus any funeral expenses.
If your Estate valuation totals more than £325,000 then you may have an Inheritance Tax Liability. However, there are other reliefs available including relief if you are leaving your residential property to direct descendants, if you have any business assets and if you are married or in a civil partnership and leaving your estate to your spouse or civil partner. It is worthwhile seeking advice from a professional in order to ensure you are taking advantage of all the reliefs that may be available to you.
There may also be other options available to you, depending on your Estate Valuation, your income and projected needs over your lifetime, in terms of Trusts and Financial planning to reduce any Inheritance Tax liability, again it is worthwhile seeking expert advice in relation to this.
You may well benefit from making gifts during your lifetime, but this may not be possible for everyone.
Once you have a better idea of your Estate Valuation, who you want to benefit from your Estate upon your passing and whether you have any Inheritance Tax Liability, you may want to consider whether you could benefit from making gifts during your lifetime.
Each of us is able to make gifts of £3,000 each year without attracting any Inheritance Tax liability (and we can carry this over for one-year too!).
However, any gifts that exceed this may still be liable for Inheritance Tax if made within seven years of your death…again, we would recommend seeking professional advice if you are considering making gifts during your lifetime.
Do your loved ones know what your plans are for the future, do you have certain expectations in relation to your later life care (this could be dealt with in a Lasting Power of Attorney) or perhaps even your funeral?
You may even want to give gifts in your Will with a condition attached (upon reaching a certain age, to be used for certain circumstances or only to be received upon meeting a condition).
Setting these out can be really helpful, not only in giving you peace of mind but also in preventing any unnecessary arguments or disputes when you are no longer around.
Another consideration that may be worth thinking about, is whether you would like to leave anything to Charity upon your passing.
If you are leaving 10% or more of your Estate to a Charity then your Inheritance Tax Liability will be reduced from 40% to 36%.
We are always happy to have a free chat to answer any questions that you may have, offer advice or help you to put something in place.
If you have any questions or would like to discuss putting a Will in place, call us on 01727 865 121 or email us at info@TotalLegacyCare.co.uk for a free consultation
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