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What is Estate Planning and Do I need it?

Wills

Estate Planning is a term which encompasses many things, but it normally means saving tax. Unless you are worth more than £650,000 if you’re married (or in a civil partnership, which for tax purposes is the same as marriage) or £325,000 if you’re single or merely living together as an unmarried couple, you probably won’t need it. However, we can still help you mitigate care home fees and provide for your loved ones in the future. If you would like to find out more about this, read our article ‘Will I have to sell my home to pay for care fees?’

What is the Residential Nil Rate Band and am I eligible to receive it?

If you’re worth more than £650,000 as a married couple or otherwise £325,000 it is a good idea to ask us to check that you will be eligible to receive the Residential Nil Rate Band (RNRB). You may recall that under David Cameron the Conservatives promised to increase the Inheritance threshold to £1,000,000 for a married couple. They did this by introducing the RNRB, which gives each person an extra £175,000 tax free, but it is heavily caveated and nowhere near as straightforward as the normal Nil rate Band. For example, it only applies to Residential Property and can only be used if the property passes to particular beneficiaries immediately. What all of this means is that Wills which limit children/grandchildren to inheriting at any age later than 18, or which have any form of trust in, may not benefit from this allowance.

Furthermore, for anyone worth more than £2,000,000 there is a sting in the tail. The relief actually starts dropping off, so once you are worth more than £2,350,000 you lose all that relief. Business Property relief and Agricultural Property Relief are not credited against the above figure. So, if you own a business or are a landowner (but not a farmer and hence cannot get farmhouse relief – which is a topic too extensive to be covered here), you need to make sure that you do not lose out on these valuable reliefs.

Estate planning advice from Hegarty Solicitors

So, what do we do? Well, first and foremost we learn about you, your family, and your assets and what it is that you want to achieve. This is a bespoke service, there is no “one size fits all”. We are happy to work alongside any Financial Advisor or Accountant you may have, and we will look at a number of different ways your aims can be achieved. This could be:

  • Investing in products which provide Business Property Relief or obtain other benefits.
  • Amending your Wills to be more tax-efficient.
  • Creating Trusts (also known as Settlements) to provide for your family in the years ahead and gain the maximum Reliefs possible.
  • Making gifts.
  • Utilising your pensions in the most efficient manner.
  • Making use of life insurance policies in the most tax-efficient manner.

We are here to help you reach your goals for you and your family and you will be able to choose the right path for you. We have no products to sell, we offer advice to enable you to make an informed decision about the options available to you. Estate Planning used effectively, can save you a fortune.

Helping you save money and achieve your aims

Recently, I was able to save a client £140,000 in Inheritance Tax simply by advising him to make a substantial gift a few months before he died (there was no need to survive seven years). As you can imagine, his family were very grateful and the only losers were HMRC. However, it was very nearly too late, as unfortunately, my client passed away before anyone expected him to.

So, if you think that you may need some Estate Planning Advice, don’t leave it until it is too late. Greg Baker and Martin Banwell from our Wills, Trusts and Probate team regularly help people just like you to achieve your aims.

Contact us
Greg Baker
Martin Banwell

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