Planning your legacy so they don’t have to

Planning your legacy isn’t just for you– it’s for the people in your life too. It’s about making a Will, planning for inheritance tax (IHT), planning your funeral and deciding who’s going to make decisions for you if you can’t make them yourself anymore, aka, Power of Attorney (POA). Here’s our quick guide to planning for the inevitable.

Why a Will?

Without a Will, your property and belongings might go to people you don’t want them to go to when you die. When you have a Will, you decide how you'd like your estate to be distributed. It could help prevent arguments over who gets what and makes sure your wishes are clear.

Find out more about Will writing

Will Inheritance tax affect me?

Inheritance tax can be complicated, but there are a few basics it can be good to know. For example, it can take up to seven years for some inheritance tax plans to take full effect.

5 things you need to know about inheritance tax (IHT)

1. The 7 Year Rule

Anything you gift seven or more years before you die is likely to be exempt from inheritance tax, as long as it’s left to people rather than businesses or trusts. If you die on or before the seven years are up, the gift may be included as part of your estate, but if it’s been three or more years not all of the gift will be taxed.

2. IHT doesn’t just affect the wealthy

Traditionally only the richest people were affected by inheritance tax. But rising property prices have changed all that. It all comes down to the value of your estate when you die. If it’s worth more than your personal ‘nil rate band’, anything above it is subject to 40% inheritance tax.

3. Residence nil rate band

There’s a residence nil rate band too. It can be used in addition to your usual nil rate band, but the rules are complicated. Amongst the restrictions, you can only use the allowance to pass on your main home to a direct descendant – like your child or grandchild – but not to a friend, niece or nephew.

4. Your estate isn’t just your home

Your estate is basically everything you own from your home, car, savings and investments, right through to jewellery and household furniture.

5. You could do something about it

There are plenty of legal steps you can take to protect your estate from inheritance tax. The fact that it can be complex means it’s often worth speaking to a financial adviser

Some IHT planning solutions put your capital at risk so you may get back less than you originally invested. IHT thresholds depend on your individual circumstances and prevailing legislation, both of which may change in the future. Some areas of IHT planning are not regulated by the Financial Conduct Authority.

The power of POA

A Power of Attorney (POA) is a legal document that lets you choose someone to make decisions on your behalf if you become unable to make them yourself. You can only appoint someone as your POA while you have the mental capacity to do so.

Power of Attorney can be really useful if you get an illness like Alzheimer’s, and can ease a lot of stress for the people in your life who might otherwise be faced with some really tough situations. It's worth knowing that the Skipton Will and POA Referral services are provided by our partner Redstone and are not regulated by the Financial Conduct Authority.

More information about making a Power of Attorney

It’s your funeral

So – you’ve told your family you’re happy to be buried in a cardboard box. But in practical terms, how much does that really help them?

If you don’t do it, someone else will have to

Even the simplest funerals need planning. And the fact is - no one really wants to plan yours. Least of all the people you’re closest to. Not just because they’ll be grieving, but also because they’ll have to guess what you want from your final outfit to your favourite song. Planning ahead can eliminate those worries for them and help make sure you get the send-off you want.

It should be like buying a car

Your loved ones probably won’t be searching for the best deal or the lowest price for your funeral – they’ll have other things on their minds. But a prepaid and prearranged funeral plan means that they won’t have to make those important decisions under stress.

You could save money

It’s probably not the first thing that springs to mind when you’re looking to save money, but it’s possible to beat rising funeral costs by paying for your funeral in advance.

Plus, finding someone to do a cardboard box funeral service - it's not as easy as it sounds.

How we can help with your funeral planning

Want to make a start on your legacy planning?

We could help you put plans in place that are right for you and your family

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