Estate Planning – Useful Information
Top 5 ways that Keynote Legal can SAVE you money.
An insight into the world of Wills and Estate Planning!
1. How to pay less of YOUR money to the Government!
When your estate is divided up, some of it will go into the government coffers to settle the Inheritance Tax burden. When you get a Will or a trust a skilled adviser can divide up your estate and even put parts of it into trust that will reduce your inheritance tax burden.
Who pays the inheritance tax? Well, it could come out of your estate and that might mean that your property has to be sold. It could be the people receiving your inheritance. Either way, you need to think carefully about who should be burdened with the tax.
With a Will, you can make sure that more of your money goes to the people you choose.
2. Pay less in Probate Fees!
What is probate?
In laymans terms it is the legal bit that happens when you are sorting out (administering) someone’s estate after they have died. Frequently you have to obtain a “grant of probate” before you can administer the estate.
Probate can be complex, if you employ a company to carry out the administration, their fees can be up to 4% of the value of your estate. However, if you put property or assets into trust, you can take them out of your estate for probate purposes. This can even reduce your estate to such an extent that you don’t need to apply for probate at all.
Essentially a property in a trust falls outside of probate and that means the trustees can deal with it without waiting for the probate to be sorted out. This saves a lot of time as probate can be a lengthy process.
3. Use Trust Arrangements!
Trusts are a useful legal tool for any future planning. In simple(ish) terms, a trust is a legal device that takes money and assets, (even your home) out of your estate and you no longer own it. However, you can remain in control of it and even benefit from it.
The reason this is so important is that it means that if it is no longer part of your estate, certain creditors cannot claim on it. If you have sudden unexpected health costs, they cannot claim against the trust (as long as it was not set up to avoid paying care costs.) They can even protect your money from people who may wish to make a claim on your estate after you are gone.
4. Get a Lasting Power of Attorney!
Don’t pay for Expensive Applications to the Court of Protection.
If you become ill or are injured and unable to manage your affairs, or make decisions about your welfare then someone will need to help you. They may need to pay your bills, or make decisions for you. If you have a Lasting Power of Attorney in place, there is no problem and the people you chose can take over for you.
If you do not, then someone may need to apply to the Court of Protection before they can help with your affairs. Your bank accounts will be frozen and benefits cannot be collected without the authority of the Court. The Court will choose who that person will be and it may not be someone you know. This costs money and takes a lot of time, it can be very stressful for your family at a time when they are already under pressure as you may be seriously ill.
The best thing about a Lasting Powers of Attorney is that you can choose, a partner or a friend, to immediately take care of your affairs. They can arrange for your bills to be paid, collect your benefits even sell your house. You can also ask them to make medical decisions on your behalf. The person is legally required to always act in your best interest.
5. Don’t forget your Will… !
This is absolutely key to ensuring your money goes where you want it to.
A badly drafted will can have all sorts of unintended consequences. Money that is inherited could go to people outside the family. Money and assets could be frittered away by a reckless beneficiary (person who receives your money). People can even claim against your estate under the Inheritance (Provision for Family and Dependants) Act 1975. You need to consider whether it is better to provide for a dependent in your Will or would you prefer to let the courts decide what to give them from your estate?
If you don’t have a Will there can be unforeseen consequences. Imagine a family where two parents don’t have Wills. The husband sadly dies and the money goes in part to his wife. When the children are grown and the wife remarries someone new. Then she too sadly dies. The money from the original marriage could then be inherited by the new spouse. Imagine what the first husband would say to that! Sadly this happens all the time. Many families tell similar stories every day.
So arrange to have your Will and estate planning drawn up professionally and you can ensure that your estate goes to help the people that you care about.
For more information on how we can help protect your family’s future.