Inheritance Tax  

Your estate planning checklist

This article is part of
In and outs of liability mitigation

Your estate planning checklist

Estate planning means different things to different people. I believe it is about helping clients to maximise the money they have to enjoy and protect the people they care about. Here are ways in which we can achieve that.

Tax returns

Make sure clients are not paying more tax than they should.

Now that should be simple, but it is not. The UK has a hugely long and complicated tax code system and hiding within it are lots of valuable reliefs, exemptions and allowances. The problem is, it is not always easy to know what a client is eligible for and how to make a claim or how, with a bit of planning, they could be eligible for more.

By really knowing a client and understanding their existing asset base – not just their investments, but also their business and any commercial or residential property they own in addition to their main home – you can find opportunities to take advantage of reliefs across income tax, capital gains tax and inheritance tax.

It is vitally important not to forget the tax return, its completion in conjunction with effectively using available allowances demonstrates the value of specialist planning, with the client seeing the tax savings generated. Having the form completed by a professional should also ensure that penalties and interest are avoided, the correct amount of tax is paid and the client moves into the next year with the right tax code and peace of mind that they are not paying more tax than they should.

Powers of Attorney

Talk to clients about appointing someone they trust to make decisions for them if they can not. 

Rather like tax returns, Powers of Attorney are often seen as something you have to do in certain circumstances. For many, that will be when they have an elderly relative they are concerned might be becoming less able to look after own affairs than they once were. But they are so much more than that. Powers of Attorney can give a client the peace of mind that comes from knowing critical decisions can be made in their absence by someone they trust.

It is not just necessarily about losing mental capacity, it could be about being out of the country on holiday without a decent phone signal or being really busy at work. Whatever the reason, ensuring a carefully structured plan does not become frozen is key. It also protects loved ones from being faced with a long and difficult court process – plus thousands of pounds in costs – to have someone appointed to make those decisions.

Trusts for family assets

Sharing assets within the family while keeping control can have some advantages.  

For some people, sharing assets could be right for tax reasons or simply because of individual family circumstances. Because of those family drivers, people are generally fairly comfortable about sharing with relatives, but they are even more comfortable if they do not have to hand anything over, so they keep control and no-one else can spend the money. That is all possible. This will generally need a trust of some kind.