Equus Estate Planning Services
This guide is supplied for general information only. You should
seek specific advice for your individual circumstances before acting on
any of the information outlined below
Inheritance Tax is the tax that is paid on your 'estate'. Broadly speaking
this is everything you own at the time of your death, less what you owe. It's
also sometimes payable on assets you may have given away during your lifetime.
Assets include things like property, possessions, money and investments.
Not everyone pays Inheritance Tax on death. It only applies if the taxable
value of your estate (including your share of any jointly owned assets and
assets held in some types of trusts) when you die is above
£325,000
(2011/2012).
It is only payable on the excess above this nil rate
band. If you are married or in a civil partnership you are able to
pass on any remaining part of your nil rate band to a surviving spouse or
partner. (http://www.direct.gov.uk/)
Estate Planning has become more and more popular for people whose estate
values exceed the prevailing Inheritance Tax allowance.
Such planning takes the form of :
Wills
Without a will, an estate can be very awkward and
expensive to administer. Also, there is no guarantee that your desired
beneficiaries will receive their legacy and in certain circumstances, the
government may receive the estate.
Life Interest Trusts
This type of trust allows a person
or persons whom you decide to receive the income from your estate during their
lifetime. Upon their death it brings an end to the trust and the capital is
passed to the ultimate beneficiaries that you decide.
These types of trusts are often useful when you wish to give your spouse or
co-owner the right to remain in your property and then to ensure it passes to
your children. This type of trust is suitable in a situation in which you wish
to provide for children from previous relationships as well as your current
spouse.
Family Trusts
An estate value will be increased by any
life insurance proceeds and if a spouse receives life assurance proceeds,
pension funds and/or death in service benefits from employment, these will
inflate the value of the taxable estate for the remaining estate. A Family Trust
will allow the proceeds of such policies and schemes to be held in trust for the
remaining spouse and/or desired beneficiaries and not be subject to immediate
Inheritance Tax upon either death.
For further information, please
contact Equus IFM Ltd