It is not pleasant to consider what will happen to our loved ones and friends after we pass away. However, to put them in the best possible financial situation, it is important to plan exactly where and how your assets and wealth will be distributed. Estate planning involves formulating a strategy to streamline the transfer of your assets and wealth after your death.
WGM Legal will make sure that you have everything put in place in the most convenient, proactive, and cost-effective manner. To speak with one of our personnel about how you can move your estate forward, get in touch with us today.
Why Is It Important to Organise Estate Planning?
There are many reasons as to why organising your estate before you die is of great importance and value. Firstly, having a plan in place will allow you to dictate your exact wishes in the event you pass away. This will not only offer you peace of mind but serves to simplify what can be a very stressful process for your family to deal with during an already difficult time. The process will clear up any doubt or confusion, allowing your loved ones to rest assured that they are facilitating your desires to the letter.
Having a legally recognised plan in place will also help you to avoid the risk of ‘confirmation’ in Scotland, or probate in the rest of the UK. This is a legal document granted by the court which will allow you to distribute the wealth and assets of the deceased person. Applying for this can be a complicated and massively expensive headache; estate planning will allow your beneficiaries to avoid this altogether.
Lastly, having a plan in place will allow you to avoid as much tax on your estate as possible. A series of legal techniques, when carried out correctly, can make your estate or inheritance tax significantly less burdensome and, in some cases, it can be taken down to zero. We will expand on what taxes are involved and how they can be legally offset further down in this article.
What Does Estate Planning Involve?
There are a few things that need to go into estate planning to ensure that the process that will take place in the event of your death is clear and streamlined. These include:
- Compiling a list of all of your assets and possessions as well as any outstanding debts that you hold.
- Informing your family about where you keep your will.
- Outlining your funeral wishes for those responsible for organising it.
- Creating a record of every gift you have given within the last seven years which ensures you won’t pay any more in inheritance tax than is necessary.
Again, it is not pleasant to consider what will happen to your family and estate after your death, but with all of these procedures in place, you can be sure your exact wishes are fulfilled. Remember, not having a plan in place will only leave a bigger burden on the people that care about you.
Don’t Pay More Tax Than You Owe
Inheritance tax is a key part of handing over an estate, but we should also make sure that we are not paying any more than what we actually owe. If you have an estate valued at over £325,000, then you will be subject to inheritance tax. Our company will make sure your assets are handled in the most tax-efficient manner, meaning that your family and friends receive the biggest proportion of your assets as possible.
There are very precise and in-depth financial laws regarding gifts, legislating for things like:
- You may give away £3000 a year in gifts which will not be taxed, known as your ‘tax exemption’.
- Money to charities and political parties, or money to help with living expenses for the elderly or young people under the age of 18, will also not be taxed.
- Gifts for specific events such as birthdays, Christmas, and weddings can also be made exempt.
By negotiating these rules and regulations, we can make sure that all of your gifts are properly recorded and accounted for. This will ensure that your beneficiaries will pay as little tax as possible while still fully complying with the law.
For a free informal chat or an immediate response please call us on 0141 616 6655.