There is never as good a time as now to get your estate in order. If you have a family to take care of then no matter how much, or how little, you are worth you should still have a basic financial plan in place that will ensure those you care about are looked after when you are gone.
Most people hear the phrase 'Inheritance Tax' and feel a shiver of fear down their spine without actually really knowing what it means. You are only liable to pay this tax if your estate, which means your property and other assets, exceeds the value of the current tax threshold. The amount for this year is 325,000 pounds, so if all your assets are valued above this figure when you die, the tax on your assets is payable at 40%.
There are some exceptions to this rule however, such as if you leave your estate to your husband, wife or civil partner. A financial advisor will be able to help you understand the ins and outs of inheritance tax and estate planning and allow you to work out whether or not you have to pay, or if whether you will be exempt from this tax.
To do nothing is simply not an option. If you don't do anything about your tax situation then you could very well end up leaving a significant tax liability when you die, which means any member of your family, or whoever you have decided to leave your assets to, will get considerably less than expected.
You may think that you don't have assets totalling this amount of money, however once you start to calculate everything you own you'll be surprised how quickly it all adds up. The value of property means there are actually a lot of people out there who are fast approaching the threshold for inheritance tax. Think about it, if you own your house calculate the current market value of the property, add on the value of your car, any money in a current or savings account, plus any ISA's, stocks and shares, PEP's, life insurance or other polices.
A will is a very effective way of laying out exactly who you want to get what and prevents any argument within the family after your demise. If anything should happen before your children are old enough to look after themselves then it also is a good place to name their guardians. Before you make your will however, you need to consider what you have to leave. The best place to start is to list everything you can think of; this includes property, investments, savings, insurance policies and any business interests. Then think carefully about who you want to inherit your assets.
With the help of your solicitor, your Will can be written. If appropriate, your solicitor can also set up a Trust to take care of your family's future. They're relatively simple to put into place and are basically just an arrangement that allows for asset transfers to take place between the various parties.
Trusts are legal systems that allow you to place conditions on how and when your assets will be dispersed on your death. For example, recipients might have to reach a certain age before they have access to the fund. Alternatively, perhaps a certain figure from the initial sum is released at regular intervals to help with monthly expenses. They can also generate money so payments can be made to the beneficiaries without touching the original capital sum.
Plan ahead and you'll be able to reduce your inheritance tax liability and make sure your estate goes to your chosen beneficiaries. A financial services firm can highlight many of the areas that you might need to address when looking at your inheritance tax liability. They can assist with many aspects of the financial planning your estate and liaise with your solicitor when your solicitor is drawing up a tax-efficient will.
Online you'll find financial services firms who can help you out with organizing your financial planning for retirement. Inheritance tax planning doesn't have to give you a headache, employing a competent financial advisor can be an important part of your overall financial strategy.
Artice Source: http://www.articlesphere.com
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