Many of our clients may not realise the scope in which it could help them until they use the Brunsdon Estate Planning service, which could provide solutions to the problems they didn’t even realise they had.
We’ve collated the most useful tricks of the trade that can benefit you NOW, not just your family in the future.
Bank of Mum & Dad
Families are bracing for a winter of energy price increases, and it’s the younger generations with lower disposable income who’ll be hit the hardest by the looming energy bill crisis. Cue loving parents. According to Estate Agent Today [1], parents are set to lend £25bn to children over the next three years (2022 – 2024).
Imagine your daughter and her boyfriend want to buy her first property but haven’t got enough cash for a deposit. You and your partner want to help her financially but feel anxious about what would happen if they broke up. We don’t blame you, but thankfully, we could help you.
Buying a home is a significant investment so safeguarding the interests of everyone involved is essential. All you need to make this a water-tight reality is a Declaration of Trust. Legal guidance is recommended. You can set out your contributions and the terms of your loan contractually so you have full confidence the money will remain in the family should they go their separate ways.
Declarations of Trust come with complexities that need to be drawn up based on your unique situation – book a call today to discuss how we can help from Mortgages to Declarations of Trust.
Give to charity
Whether you have heirs or not, many people choose to give back. You can give to one charity close to your heart, or many which can be very comforting.
The benefits of donating your estate to a charity go further than pure philanthropy; it also has significant implications on your Inheritance Tax liability. The “charitable legacy” you leave behind won’t count towards the taxable value of your estate. In addition, if 10% or more of your net estate is left to charity, this would cut the Inheritance Tax rate on the rest of your estate by 4% (from 40 to 36%).
The Spendthrift Provision
“Help, I want to include my son in my Will but he’s concerningly irresponsible.”
We’ve heard many parents worry about rebellious heirs, and luckily The Spendthrift Provision is something that can be used for several reasons. It can be included in your Trust to limit the transfer of a beneficiary’s interest in the Trust assets. This protects any assets, such as your house from your son selling it for cash.
This Trust can safeguard the funds to only be used how you deem fit; you may require the money from any sale to be reinvested in another house or used to pay off a student loan.
Philanthropy
Some of our clients don’t have any living family and are at a loss on what to do with their estate. We’ve already mentioned charitable gifting, but if you want to build your legacy, you may also want to consider setting up a foundation or giving back to the community.
You can leave your money for something that the general public can all enjoy. You may have an affinity with a local park or choose to give money so you can help care for the natural beauty and conservation of your local area. Or a foundation can be set up whilst you are alive and your possessions and estate can be donated to the running of the foundation upon your death.
Protect your partner
Estate Planning for unmarried couples is arguably even more necessary than for married couples. If your assets are not in joint names as joint tenants, if one partner were to die without a Will in place, the surviving partner will inherit nothing. In this situation, any children of the deceased would inherit the entire estate (or other family members if there are no children). Unmarried couples won’t even be able to make end-of-life decisions if no estate plan is in place.
Protect your business
Business owners need to consider whom they want to take over the business should anything happen to them. People put their blood, sweat, and tears into growing and nurturing their business and it’s likely the main motivation was to provide for their family and ultimately pass it down.
But if the necessary measures aren’t taken to protect your business, it could end up falling within the value of your estate and leave your heirs with a large IHT bill. This can sadly result in the selling of the businesses just to pay the tax so it’s important to plan to ensure this doesn’t happen.
The best way to prevent this is by keeping a succession plan and Will up to date clearly outlining how you want your business distributed. You should include details about the running of the business and distribution of your shares – an effective plan will enable the business to continue running effectively once you’re gone.
Protect your blended family
Blended families can be complex so well-considered Estate Planning is essential. When partners, children, and stepchildren are involved, it’s important to be detailed in outlining whom you want to inherit what, and when.
Many of our clients from blended families face the dilemma of wanting to provide for their partner should anything happen to them, but also protect their children. They may want to ringfence everything that was brought into the relationship for their own children to inherit and leave the mutual assets to their partner.
A professionally drafted Will will ensure the inheritance is balanced appropriately between the surviving partner and all the children. Without professional advice, there’s the risk of jeopardising family relationships and even legal disputes should the worst happen.
Protect your money from care home fees
The average care home fees in the UK range from £27-39k per year for residential care, and £35-55k per year for nursing care [2]. But thankfully, there are Estate Planning solutions to avoid your hard-earned assets being depleted by nursing home costs.
We can help you set up an asset protection Trust which is the best way to protect and mitigate your loved ones’ inheritance from care home fees. Legal guidance is recommended. Trustees will need to be appointed to manage the Trust.
