Let your wishes be known
There are many complexities surrounding inheritance tax, but with careful planning it may be possible to avoid paying unnecessary tax and minimise uncertainties surrounding how your estate will be managed.
It is important to make sure you have a will if you wish to choose the individuals who will benefit from everything you own - your estate, home, money, life insurance, inheritances and lifelong acquisitions.
Without a will – or dying intestate – can have major implications. Your estate would fall under the rules of the country in which you reside, and potentially leave your loved ones with insurmountable problems.
We are not a legal service. However, we do have access to reputable legal and professional service providers all over the world, to help you find the best multi-jurisdictional solution.
Protect your assets with a Trust
There are a great many reasons you might set up a trust: to support someone in the future who can’t manage their money yet; or even to support you if one day you are unable to care for yourself.
A Trust is a legal arrangement whereby trustees control money or assets which must be used in support of a beneficiary. Trusts are very useful if you are leaving a large sum of money to a child, or someone with a mental health condition or learning disability.
Place your life insurance in a Trust
A life insurance policy is considered part of your estate, which means it could be subject to inheritance tax. However, by simply putting your policy into a Trust can help protect your beneficiaries from the tax man. Other benefits of a Trust include:
Avoidance of unnecessary tax: UK Inheritance Tax wipes out 40% of any value over the threshold of 325K Sterling upon death. However, you can ensure your beneficiaries receive the money you set out to leave, simply by setting up an appropriately worded trust that keeps your protection policy outside of your estate.
Expedite payments on death: The loss of a loved one is very often compounded by the financial problems that can burden families who are struggling to cope with grief. However, by writing a protection policy into your trust, it is possible for trustees to receive proceeds without the need for a Grant of Probate.
Flexibility to make changes to your trust: However hard we plan for life, circumstances change over time. Marriage, divorce, additional children and loss of loved ones can all impact your estate planning. With the right wording, a Trust can incorporate a degree of flexibility, taking into account a number of beneficiaries, ultimately ensuring proceeds are received by the right person at the right time.
Joint life policies: Proceeds from joint life policies are passed to the surviving partner. But if the partner dies a short time later, a Trust with an appropriately worded reversion provision can direct proceeds to dependents.
Protect your young: The untimely death of parents is an upsetting prospect, but one you only need contemplate for a few moments. In the event children are robbed of their parents, an appropriately worded Trust protects their best interests, by placing large sums of money in the care of adults and solely for the benefit of the dependents, until they reach a suitable age.