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Estate planning: What you need to know

14th September 2018

Estate planning is unlikely to be at the top of your financial to-do list. Like writing a will or choosing a life insurance policy, planning what to do with our estate when we die can feel uncomfortably morbid, so we pretend we do not have to do it. Despite this, estate planning is really important and you do not have to be wealthy to have ‘an estate’ either.

In simple terms, your estate is everything you own. Everything from your largest possessions like your home and car, down to your smartphone and television is considered to be your estate. It’s certainly worth spending a bit of time planning what you wish to do with your estate upon death, so that you can ensure your friends and family benefit as much as possible.


Why you should start planning

The estate planning process will not only ensure that your friends and family get more of your estate (while the taxman gets less) you will also make sure that your family has access to your will and that any funeral proceedings go the way you want them to. Start the estate planning process early will give yourself plenty of time to work closely with an estate planning specialist. Working with an expert helps you to ensure that the beneficiaries get as much out of your will as possible.


Getting the most out of inheritance tax

One of the most important reasons to spend time estate planning is to ensure that the money you wish to pass on goes directly to your beneficiaries. If unplanned, or planned ineffectively, you may find that you are heavily affected by inheritance tax.

There are many ways to plan your estate to lower the impact of inheritance tax. For instance, you could set up a trust fund, or decide to gift money to your friends and relatives while still alive. If you go on to live for seven years after giving these gifts, inheritance tax will not be levied as long as you do not give gifts of more than £325,000. Speak to an estate planning specialist to discuss the best ways to avoid paying too much in inheritance tax, ensuring that your loved ones receive exactly what you’d like them to have.


What does estate planning involve?

Estate planning tends to be broken down into four key factors which an estate planning specialist can guide you through:

  • Writing the will and making your executors, close friends and family aware of it.
  • Making a list of both your assets and any debts.
  • Noting down any gifts you plan give to ensure a more beneficial inheritance tax situation.
  • Setting aside funeral expenses and making your wishes clear.


Everything else

Even with the assistance of the best estate planning specialist, you still need to be sure that you write a will alongside all of the other aspects of estate planning. Writing a will is incredibly important, even at a younger age, as we have emphasised in previous articles. If you die without a will, you are considered to have ‘died in intestate’, meaning that neither you or your loved ones get to choose the beneficiaries of your estate (instead the law decides who gets what).

Planning your estate early is especially beneficial if you have a family history of degenerative conditions such as Alzheimer’s disease or receive an early diagnosis. Plan your estate while you are of sound mind. You can also ensure that you are especially prudent in organising the ways in which your estate will be used to provide long term care. We appreciate that this can feel like a negative subject but putting plans in place for your estate beyond your life is the best way to ensure financial security for your loved ones when you are no longer here. It also encourages you to take note of what you have earned and achieved which is a very positive thing.


The best way to plan your estate is to meet with an estate planning specialist to decide on how best to proceed. Contact the IMC estate planning team today to make the best provisions for your future.

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