Estate Planning is often associated with Inheritance Tax mitigation. Whilst tax considerations are important, Estate Planning goes beyond this and is intended to preserve, protect and pass on assets and family wealth in an appropriate manner. This involves assets passing to the correct people at the correct time. Asset protection and control of assets are also important considerations.
At The Will Bureau, we have advised many families on strategies to protect their wealth through several generations. We consult with clients in order to understand their circumstances, expectations and relationships with their family members. Estate Planning, therefore, is necessarily a bespoke service and can never be uniform. It should be a continuing service and not regarded as a once and for all event.
The basic principles of estate planning are set out below:
- To gain an understanding of a client’s objectives;
- To make a Will appropriate to the client’s current situation;
- To consider what gifts in lifetime may be possible, now or in the future. Assessing surplus of wealth over required expenditure and a client’s attitude towards devolving wealth;
- Deciding what are the most appropriate assets that can be transferred. For example, assets with potential for future capital growth may be best in the hands of the next generation (or in trusts for descendents);
- Deliberation of the various tax implications of lifetime transfers. The impact of Capital Gains Tax, Inheritance Tax and Income Tax on the donor and the recipient will need to be considered.
- Retaining some flexibility for future planning, or changes to circumstances must always be considered. Changes in fortunes and family relationships cannot always be predicted, therefore retaining some control of assets is desirable for many clients.
- Review of the Estate Plan is sensible, to determine changes to the clients intentions, family structure, expectations for the future and amend the plan accordingly.