Life Assurance
Protecting your family against financial hardship in the event of the early death of a key member has become standard practice, and many of us have policies tucked away to be brought out if needed.
There are two important reasons why you should dust off those policies and give them a closer look, to make sure that you are getting maximum benefit from them:
- Review the rates you are paying. Life assurance has become much cheaper in recent years and it may be that you are paying too much. Get alternative quotations to check how your policy compares to others, and if necessary, change it.
- Make sure the benefits are written in trust. Writing the benefits of a life assurance policy in trust has two advantages:
- The payment can be made immediately upon the death of the policyholder, rather than having to wait until probate is awarded.
- The amount paid out is not subject to inheritance tax.
Inheritance Tax Planning
Inheritance tax will be payable on your death if your estate is worth more than the “nil rate band” – currently £300,000. If your estate is worth more than this, your heirs will pay 40% tax on everything above this amount.
The Chancellor announced in his 2007 Pre-Budget Report that he plans to make changes to the way the nil-rate band is applied to married couples and civil partners, giving an effective nil rate band of £600,000 for the remaining spouse or partner after the death of one partner. The new legislation, if it is successfully passed into law, is planned to take effect from April 2008 and is expected to be applied retrospectively.
There are a number of measures you can take to minimise the effect of inheritance tax. With our help, you should look at the following areas:
- Is your property jointly owned – if so has the ownership been set up to ensure both you and your spouse/co-owner can use your nil rate band effectively?
- Are you making the most of all family members’ tax free allowances when bringing income into the household?
- Can you use trusts to ringfence assets so they are not taken into account when inheritance tax is due?
- Would an insurance based policy or trust that pays out on your death to cover inheritance tax work for you?
Contact us to arrange a free no-obligation meeting to discuss how we can help minimise your potential inheritance tax liability.
Wills, Trusts and Power of Attorney
It is astonishing how many adults in the UK still haven’t written a will (reports suggest it may be as much as 50%). However, the common belief that if you don’t make a will your estate will automatically pass to your spouse is a fallacy. The estate will be divided according to a set of rules laid down by the Government and this could lead to the family home having to be sold to raise other claimants’ share of the pot.
Good estate planning can save your family and heirs a great deal of stress and anxiety at a time when they can perhaps least cope with it. We strongly recommend that you take time to evaluate your estate and to make provision for its disposal upon your death. We are happy to help you with this process, and can show you how to use trusts to secure your assets for the benefit of your heirs.
An enduring power of attorney allows you to appoint someone to manage your affairs in the event of you becoming unable to do so. This document doesn’t mean you immediately lose control of your estate – you can determine when and how it can be used. In most circumstances we would recommend that you set one up whilst you are fit and well – if you wait until it is needed, it could be too late.
Publications and Links
Please be aware that by clicking on some of the links below you are leaving the Almary Green website. Please note that Almary Green are not responsible for the accuracy of information contained within the linked sites accessible from this page.
The Probate Office: www.hmcourts-service.gov.uk/cms/wills.htm
Her Majesty’s Revenue & Customs: www.hmrc.gov.uk
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