With careful planning and professional advice, it is possible to protect your money and estate to either reduce or perhaps even mitigate potential inheritance tax for your beneficiaries.
Here are a few thing that you can do to help ensure your money goes to your loved ones and not to the government:
Make a Will
The first and most important step to ensuring your wealth is passed on to the right people is to get a will professionally drafted. Unfortunately a significant number of adults with children fail to make a will. Making a will ensures that your assets are distributed in accordance with your wishes.
Allowable Gifts
Cash or gifts of up to £3000 in each tax year are exempt from inheritance tax. So by passing on the savings whilst you are still alive, your family will not only benefit financially but you will be able to see them enjoy the money you are gifting them.
Give away assets
We are increasingly seeing parents providing children with funds to help them buy their own homes. This can be done through a gift, and, provided the parents survive for seven years after gifting the money, it will automatically ends up outside their estate for inheritance tax calculations.
Make use of trusts
Using a trust can be another way of protecting your assets as they no longer form part of your estate. There are many different types of trust available which usually involve parents investing a sum of money into a trust. A trust should have a minimum of two trustees whose role it is to ensure that on the death, the investment is paid out according to your wishes.
The most widely used trust is a ‘discretionary’ trust, which can be set up in a way that the settlors (parents) still have access to income or parts of the capital.
So as you can see there are many ways you can ensure that your wealth is passed on to your loved ones. To begin the process of writing a will or to set up a trust, get in touch to discuss your options we will be more than happy to help.
