In this article I review why planning your estate is so important.
Not just in the financial sense, but also when it comes to the relationships within the family you leave behind.
I’ll also tell you who I personally recommend you use to plan your estate AND how to get £25 off the cost of your Will.
But first of all…
What Is Estate Planning?
Estate planning; sounds very grand, doesn’t it?
You probably think it’s something only the uber wealthy need to worry about….but in fact, estate planning just means deciding who will get your assets, collectively known as your ‘estate’, after you’re gone.
When you think of ‘assets’ you might be thinking of a family home, a property or stock portfolio, or the cash in the bank.
But, in reality, your estate could just be personal belongings or treasured possessions – some beautiful jewellery, a painting that’s been in the family for generations, or even your vinyl collection.
So, why is it so important to plan what is going to happen to your estate, however big or small, after you die?
Why can’t your loved ones decide amongst themselves who gets what after you’re gone? – they’re reasonable human beings aren’t they?
Well, that brings me to the first reason….
Estate Planning Will Help Avoid Family Dramas
No one knows your family better than you, and apart from that one Christmas when cousin Barbara got drunk and insulted your mum’s turkey, family rows are not commonplace.
But, however close family members are, nothing leads to turmoil faster than a loved one dying without having concrete plans in place as to who inherits what.
You can imagine how it goes…
Both of your daughters insist that you said they would be left the ring that belonged to your great-grandmother, but your sister thinks she should have it.
Of course your nephews are going to take her side, and before you know it a family feud is in progress – one that could rage on for years.
Having your wishes expressly written in a legal Will is the best way to avoid all of this.
We’re not saying that there won’t be any disgruntled family members, but at least everyone will know exactly who you wanted to inherit that ring – even if they don’t agree with your decision.
Estate Planning To Protect Your Young Children
We all understand that the majority of us will be survived by our children – and that’s of course how it should be – but with any luck they will be grown, maybe even with children and grandchildren of their own!
But what if they’re not grown?
It’s not nice to think about, but if you were to die while your children were still young, what would happen to them?
‘That’s easy,’ you might be thinking, ‘they’d go to my parents/sister/trusted family friend.’
Unfortunately, much in the same way as the distribution of your assets, unless you have these wishes regarding the custody of your children written in a legal Will, that decision isn’t yours to make.
It will be the government that decides who is the most suitable guardian for your children; which, again, could lead to family arguments, as well as a lot of extra stress, upset, and upheaval for your children.
Estate Planning Means You Can Decide When Your Children Can Access Their Inheritance
This comes under the banner of protecting your children – but this time their financial future.
I think we can all agree that allowing anyone under the age of 18 unhindered access to any amount of cash isn’t a good idea!
Largely because before you know it they’ll have spent it all on clothes and hanging out with their mates, when you might have intended their inheritance to go towards a university education, a car, or a deposit on a house.
If you put this in writing then these aren’t just the empty words of a kill-joy relative, desperate to halt the pursuit of fun at any cost…
…they are now part of a legally binding contract, so tough luck, kids!
Estate Planning Can Protect Adult Beneficiaries Too
When it comes to leaving money to loved ones in your will, it’s the adults that can present the biggest problems.
There are many reasons why an adult beneficiary might make bad decisions with their inheritance; being in a lot of debt, having an expensive vice, being surrounded by ‘friends’ who would take advantage of their generous nature…
Or simply being bad at managing money.
Let’s face it, our loved ones aren’t perfect, but you don’t want to leave them out of your Will because you’re worried about how they will cope with a bit of newfound wealth.
With proper estate planning you can control how and even when your adult beneficiaries receive any inheritance you plan to leave them, and even how you want it spent.
With Proper Estate Planning You Can Avoid Or Reduce Inheritance Tax
We’ve all heard of inheritance tax and none of us like it.
But, with estate planning you can avoid a big tax bill, making the whole process easier and cheaper for your loved ones, and ensuring that your beneficiaries receive what you intended.
One of the best ways to keep control of your assets and make sure that the tax man doesn’t get his hands on them is to place them ‘in trust’ so that they don’t form a part of your estate.
Estate Planning Means You Can Keep Your Assets In The Family
It could be that your spouse remarries at some point after your death – no doubt knowing that you would want them to go on and have a happy life even after you’re gone!
(If not, you could always haunt them until their dying day and then take it up with them then).
Either way, it’s natural that you would want any assets to go to your children and grandchildren, rather than your spouse’s new husband or wife and any other new family members.
Planning properly and having a legal will in place means you can make sure that only the people you want to benefit from your estate do!
Estate Planning Will Give You Peace Of Mind
Imagine for a second how it would be to not have an estate plan – for your loved ones it would cause extra stress during an already incredibly difficult time.
Without a will and plan in place your family could end up involved in a lengthy and costly court battle, have large tax expenses, or maybe even have no say over who becomes the guardian of your children.
I recommend you speak to the guys at Newlife Wills.
They provide Will advice in Kent.
I personally used them to arrange my will.
They can help you through the process of estate planning and making a Will step by step, and answer any questions you might have.
And – if you contact them through us at More Than Money, you’ll receive a £25 discount.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes that cannot be foreseen.
Will writing is not part of the Openwork offering and is offered in our own right. Openwork Limited accepts no responsibility for this aspect of our business. Will writing is not regulated by the Financial Conduct Authority.
