Table of Contents
Many of us put off estate planning as the prospect of addressing this process can seem daunting and sometimes upsetting. However, having an estate plan in place is very important in order to ensure your money, property and other assets go to your intended heirs.
It’s best to sort out your estate planning with a professional organisation like Swansea Legal Solutions as, without expert advice, you could mess up and your plan could be filled with loopholes. If you don’t know where to start even before you consult a legal professional, then here are our top five tips to get you started.
Tip #1 – Make a Will
Making a will is the first step when it comes to estate planning as a will stipulates how your assets will be divided after your death.
It may seem to be an obvious step, but you’d be surprised at how many people don’t have a will in place. The usual excuse is that people simply haven’t got around to it.
Without a will and named executors, your estate will be divided up, so someone else will decide who gets your money and all your other assets. In order to be able to administer someone’s estate your relatives will then need to apply to the Probate Registry for a ‘Grant of Letters of Administration’.
This process is much more costly and lengthy than getting your will sorted and also leaves your estate open to beneficiaries whom you may not have wanted to benefit in the first place.
Tip #2 – Name Your Executors and Beneficiaries
To avoid probate court, it’s also a good idea to have in place executors to administer your estate and to clearly name your beneficiaries and which assets they inherit.
You should also review who your beneficiaries and executors are from time to time, particularly following any life changes such as marriage, divorce, death or the birth of children
Tip #3 – Set Up a Property Trust
If you have a sizeable estate or are worried your heirs won’t be wise with your money, you can set up a property trust and appoint trustees to distribute these assets.
When you put money or property in a trust, provided certain conditions are met, you no longer own it. This means it might not count towards your Inheritance Tax bill when you die.
In essence, a trust is a legal arrangement where you give cash, property or investments to someone else so they can look after them for the benefit of a third person. For example, you might put some of your savings aside in a trust for your children.
Another potential advantage is that a trust is a way of keeping control and asset protection for the beneficiary. A trust avoids handing over valuable property, cash or investment while the beneficiaries are relatively young or vulnerable.
The trustees have a legal duty to look after and manage the trust assets for the person who will benefit from the trust in the end.
When you set up a trust, you decide the rules about how it’s managed. For example, you could say that your children will only get access to their trust when they turn 25.
Tip # 4 – Make Gifts While You’re Alive
You might not have to worry about estate tax planning if you simply give away some or all of your money while you’re alive.
However, be careful about giving away assets that appreciate in value, such as stocks or a house, which are considered high-value assets as part of an estate. This means the taxable amount of an asset is adjusted upon the owner’s death and, as a result, it may be beneficial to transfer certain assets after death rather than before.
Tip # 5 – Have an LPA in Place
Having a Lasting Power of Attorney (LPA) in place is equally, if not more important, than having a will.
This is because, no matter how old you are, a serious accident or a sudden change in your health can affect your life irrevocably. If this happens and you don’t have an LPA set up, and are unable to manage your affairs, not even your spouse or partner has an automatic right or ability to take charge of your finances or determine your health care.
Read more here.
Putting an LPA in place enables your family to avoid the considerable expense and uncertainty of proceeding through a specialist court to (the Court of Protection, which makes orders and appoints deputies to make decisions on behalf of those who are unable With an LPA, you (the donor) are able to choose your own attorney to carry out your wishes.
Swansea Legal Solutions
The team at Swansea Legal Solutions can help with all aspects of estate planning from will writing to setting up an LPA and everything else in between.
To find out more and to book an appointment with a member of our team, call us today on 01792 420844.
