The saying goes, 'Nothing is certain but Death and Taxes'. We can't control death, but we can control what happens after death. We can plan how our assets are distributed and leave behind a tax-efficient legacy for our spouse, children, extended family, and friends.

 

What Is Estate Planning?

Estate planning is putting your affairs in order (probate) so that your loved ones are cared for if you die or are incapacitated. A will is an essential piece of the plan. So are lists of your assets and obligations, with details of all open accounts. Ensure you record your beneficiaries on your retirement and investment accounts to avoid delay in wealth transference.

 

When to revise your Will and Estate Planning.

Wills are not a once-off and-leave process. Life happens, and your circumstances and needs change over time, and so do your assets and wealth. Your family might grow, or new relationships develop. Will the right people inherit your assets on your death? Your current spouse might not be taken care of if you didn't update your will and include them. Your financial advisor must do regular reviews and estate planning updates to ensure the proper beneficiaries inherit your legacy.

Custody – If you have small children, you can state who will have custody of your children or possibly give joint custody to family members and your spouse, for example.

Illness – If you develop a chronic illness or become terminally ill, you must update your will accordingly. 

Marital status – Have you married or got divorced? You will need to update your beneficiaries.

Children – If you have had children or adopted or fostered family like a niece or nephew, you may want to change your will and beneficiaries so that they will be taken care of.

Tax law may change – As tax laws change over time, your estate might not be as tax efficient as it previously was. You might have to change the way your assets are distributed in your will according to tax law.

Tax residency changes – Your tax residency can affect your estate planning as different countries have different inheritance and estate tax laws. If you have moved countries, you need to check on the tax obligations of the estate. Your beneficiaries might have a large inheritance tax bill. You must check with your financial consultant as you may need some life insurance to cover these expenses.

Executors may change – If your executor has changed or is deceased, you need to update this. If your appointed executor is a bank or company, they may have been sold or merged with another company. This needs to be updated. Otherwise, your estate will have no one administering it, and it could get tied up in probate legalities and administrative red tape. Your beneficiaries or children will be tasked with sorting out the estate.

Change in wealth and assets – As life happens, your wealth and assets also change. You may have been very successful in business and built an extensive wealth portfolio or inherited substantial money or even a property. Or you might have sold off assets. This will affect who gets what, and you must revise your will.

 

What is a Trust?

A trust is a legal entity established to manage and protect a beneficiary's assets by saving time, administration, and often inheritance or estate taxes. 

Is a Trust right for you?

Creating a trust is a unique endeavour specific to each individual's financial circumstances. Your financial advisor is the best person to advise on whether a trust suits your succession needs. Trusts are usually formed for high-net-worth estates and assets. Atom app allows you to create a trust online. 

 

Estate /Inheritance Tax

This tax could be levied on an estate or an inheritance when a person passes on. The tax depends on the country they live in and the estate's net worth, e.g. UK inheritance tax is relatively high and could reach 40%.

 

Your financial advisor will analyse your financial portfolio and make recommendations for your estate planning. This includes drawing up a will that will be reviewed regularly according to your changing needs and the possibility of creating a trust.

 

Please note, the above is for educational purposes only and does not constitute advice. You should always contact your deVere advisor for a personal consultation.

* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.