Are your loved ones relying on inheritance?
Did you know that 90% of people in the UK are hoping, and relying on inheritance, for their financial future and security? According to the Institute of Fiscal Studies, Millennials and Gen Z in particular will be worse off than previous generations due to higher costs of living, rising house prices and low wages with little rises. These factors mean that in later life, Millennials will become more reliant on inheritance funds when they are older.
Inheritances will also be used by many generations to carry out large transactions like purchasing property, paying debts, or helping raise children. It is therefore important to speak to your loved ones about wealth management, to set financial goals that both you and they can work towards, and take steps to minimise inheritance tax liability, so that when you die, your loved ones can receive what you intended to give them upon your death.
Discuss your estate with your loved ones
It can be difficult to speak to your close relatives about death, finances and your estate. It is completely understandable that your loved ones may not want to think about a time when you are no longer around. It is however important that you make your wishes known to your loved ones, as this will ensure that they are aware of your decisions regarding healthcare, end of life care (if needed), and what your loved ones will inherit when you die. When you do pass away, this will save your loved ones any confusion on what you would have wanted.
Make your decisions carefully
To avoid hurt feelings, have a conversation with all of your immediate relatives to ensure that all views are carefully considered before you make your inheritance decisions. You may, for instance, have a grandchild for whom you want to put a lump sum away, so that they can use it to go to university or purchase property in future.
Speak openly
Once you have put your plan into place and know who is inheriting what, you will need to speak openly about the choices you have made, where your loved ones can find relevant documents, such as your Will, and decide who will make decisions for you if you lose the mental capacity to do so.
Why is estate planning so important?
There are several reasons why estate planning is important. The term 'estate planning' does sound far more grand than it actually is. You don't need to be very wealthy to effectively plan your estate and ensure that your wishes are followed. Estate planning just determines who will receive your assets after you die. Assets involve things like money, your property, valuables and so on.
Looking after those who matter most to you
On the most basic level, estate planning avoids any unnecessary complications and contention between family members over who inherits what when you die. It is also the best way to make sure that your children and grandchildren are financially stable and looked after for their future.
You can decide when your children can access their inheritance, and can leave sums of money to loved ones, knowing that it has been carefully planned to avoid or reduce inheritance tax. For instance, you can place some of your funds 'in trust' to ensure that they are not susceptible to taxation. Finally, careful estate planning gives you peace of mind that your wishes will be followed in the future when you pass away.
Contact our Private Client Solicitors in London, Surrey and Middlesex
At Owen White & Catlin, we can help you and your loved ones navigate the various aspects of estate planning to ensure your wishes are followed. We can take steps to help you avoid or reduce inheritance tax, through careful planning, while establishing plans for care and healthcare costs, Court of Protection and setting up a Power of Attorney.
Our solicitors offer years of experience and knowledge to give you the best personalised advice for your circumstances. Submit an enquiry via our online form, or give us a call at our offices in Addlestone, Ashford, Chiswick, Esher, Feltham, Hammersmith, and Shepperton.