Research by Brewin Dolphin revealed that 47% of UK adults have never discussed passing on their legacy, while the National Bureau of Economic Research reports that only 12% of firms make it to a 3rd generation*. Unfortunately, by not taking professional advice on your succession planning, your family may pay out more inheritance tax on the legacy they receive from you.
A consultation with an advisor could help you take advantage of the exemptions available to you and reduce your inheritance tax bill. Between 2019-2020, £5.2 billion was received in inheritance tax by HMRC. This could be due to increasing house prices, but it is also likely to be due to individuals failing to plan effectively for the future.
Wills and Succession Planning
One of the first steps you could take is to seek advice on the preparation of your Will. Although most people feel uncomfortable discussing their estate and death, a discussion can help give you peace of mind about the future. Even if you currently have a Will, there have been changes in the law recently that may mean your estate will not attract the Residence Nil Rate Band (an additional allowance for inheritance tax in relation to your property) as many existing Wills include outdated tax planning methods.
However, it is not just about tax planning. Another reason to consider your Will is to try to avoid any disputes within your family after you have gone. The last thing most people want is for their hard earned money to be spent dealing with warring family members. A bereavement is a difficult time for everyone and a well-prepared Will can help to keep the estate administration simple and straightforward for your family.
What Happens If You Do Not Leave a Will?
If you do not leave a Will, the intestacy rules will apply. These are a set of rules that determine how your estate will be distributed when you die. Unfortunately, you may not be happy with the way in which your estate would be distributed under intestacy. The rules also do not cover a number of important areas such as charitable gifts, funeral wishes, gifts of valuable or sentimental items, guardianship provisions for minor children and protection of assets for future generations.
Seeking professional advice will simplify the succession planning process and could lead to a better future for your loved ones. Get in touch with our expert lawyers to give yourself peace of mind when planning for the future.
If you would like to discuss your Will or would like further advice on succession planning, please contact Aalia Ijaz in our Wills and Wealth Planning team on 0161 475 1218 or email [email protected].