1. Make a Will.  Ensuring you understand your tax position is key to passing on as much of your estate to the next generation as possible but, if you don’t have a Will in place, it might not end up in the hands of those you want it to. Ensure you have a Will in place where you seek professional advice during the process and crucially, keep it up to date.
  2. Think of yourself. Whilst you may wish to provide for your family and leave a legacy, don’t sell yourself short. Assess your health and lifestyle and ensure you feel comfortable before putting planning in place that you may not be able to reverse.
  3. Don’t leave any stone unturned.  When you have made the decision to address your estate, ensure you review and appraise all of your assets and legal documents. It is a big commitment in the busy lives that we lead, to focus on your personal finances, so when you do it, do it properly.  One piece of missing information could significantly impact the advice given by your advisors.
  4. Consider making gifts.  Understand the exemptions and reliefs available and the different planning options which can involve immediate loss of control or retention of some control, and assess which you feel most comfortable with.
  5. Retain reliefs.  If you are entitled to valuable reliefs such as Business Property Relief or Agricultural Property Relief, then ensure your advisor explains the basis on which you are eligible for these reliefs and how they could be lost. The last thing you want is to lose valuable reliefs by taking an action which unbeknown to you impacts the relief.
  6. Protect your pension.  Pensions can often be exempt from Inheritance Tax and passed down to future generations. In light of this, consider taking an income from assets exposed to Inheritance Tax and preserving those that are exempt.
  7. Consider Whole of life Policies.  Such insurance policies can play a part in protecting your estate from Inheritance Tax.  Some may choose to take a policy out to cover the majority of their liability and others will use this as part of their plan, either way, it is useful to understand how they may benefit you.
  8. Understand if Trusts have a role within your plans.  Often trusts can be seen as complex however, explained well, they don’t have to be.  Not only can trusts provide some tax savings, but they can also provide protection to ensure family wealth remains within the bloodline and protect against family breakdowns.
  9. Encourage your advisors to share their advice. When dealing with your Inheritance Tax planning, you will often require a financial planner, tax advisor and lawyer.  What you don’t want is for them to work independently of each other. This can lead to miscommunication of who may be dealing with certain aspects and in cases, they could undo the benefits of each other’s work.  Allowing them to work together and looking at your estate holistically will ensure you get the best advice and ensure everyone understands their role and work together.
  10. It’s good to talk.  Whilst discussing plans for when you are no longer alive can be difficult, not only for you but your family, if you can, try to talk to your family about your plans so they have some understanding.  This will make things that little bit easier for them when dealing with your death.  Having to unravel and locate documents and advice can add additional stress and costs.  Even if you keep a record of all the relevant documents and details of the professional advisors who have been involved and tell your family where this is kept, it will ensure they have all the information they need and give you some peace of mind.

To discuss any of the above, please get in touch with Jennie Brown on jbrown@ellacotts.co.uk or 01295 250401.