With the Autumn Budget looming, it's easy to get bogged down by the ins and outs of what will change and how this will impact your estate planning.
However, while we cannot predict with any certainty what the Chancellor will announce, there are certain fundamental principles which never change and should always be the focus of any well-thought-out estate plan.
Before getting lost in the potential changes, you should consider a few basic tips to ensure you're in the best position come 30 October.
Firstly, having an up-to-date will in place is essential. Doing so not only ensures that your estate passes to the correct people, but it also ensures that the correct people are appointed to manage this process with appropriate protections in place for any young beneficiaries.
Additionally, if you have minor children, a will can also ensure that they will be cared for as you wish, and appropriate guardians are appointed. Having a valid will also avoids unnecessary stress and expense for your family.
If you pass away without a will, the law will determine the distribution of your estate and in some instances (particularly with a blended family structure) the results can be unexpected.
It is equally important to ensure that you have a power of attorney in place. A power of attorney can cover both welfare and financial matters and ensures that in the event of a loss of capacity (either permanent or temporary) someone is able to assist with your affairs.
With an aging population, it is increasingly important that we are all prepared in this respect. Being proactive is paramount as a power of attorney can only be put in place whilst the granter has sufficient capacity to do so. The alternative is a costly and lengthy court process.
Basic record keeping can also have a significant impact. Your records should accurately reflect the makeup of your estate, and your family and professional advisors should know where to find all the relevant information. Having your records well organised can once again, save time and expense.
When planning, it is important to also look outside of your estate. Many people forget that a pension can be one of your most valuable assets. Pension funds are not governed by your will and as such it is essential that your nomination wishes are known. Similarly, if you have any life policies, these must be written in trust to avoid the proceeds forming part of your estate and potentially increasing the inheritance tax liability.
Our personal lives are constantly changing, so regularly reviewing your documents and ensuring they continue to reflect your wishes is the key to good estate planning.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
