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 choosing 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 your legacy.

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 set out 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 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 a reduced percentage of the IHT rate (taper relief) will be used to calculate the tax payable.

2. IHT doesn’t just affect the wealthy

Traditionally only the richest people were affected by inheritance tax. But rising property prices have changed 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 is typically subject to 40% inheritance tax (or 36% if you leave at least 10% of the net value to a charity in your Will).

3. Residence nil rate band

There’s a residence nil rate band allowance too. It can be used in addition to your usual nil rate band allowance, 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 steps you can take to minimise the effect of inheritance tax on your estate. The fact that it can be complex means it’s often worth speaking to a financial adviser as some IHT planning options put your capital at risk.

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 could be really useful if you get an illness like Alzheimer’s, and could help ease a lot of stress for the people in your life who might otherwise be faced with some really tough situations.

More information about making a Power of Attorney

It’s your funeral

Thought about a plan?

Even the simplest funerals need planning.Thinking ahead could eliminate those worries for your loved ones and help them give you get the send-off you want.

It could be simple

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 could be possible to beat rising funeral costs by paying for your funeral in advance.

Funeral plans are regulated by the Funeral Planning Authority and not the Financial Conduct Authority.

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

Please note that Wills, POA and some areas of IHT planning are not regulated by the Financial Conduct Authority.

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