Everyone should have a Will. It is even more important if you have children, own property or a business, or have savings, investments or insurance policies.
You have worked hard to build your wealth. Passing it on to the next generation fairly, safely, effectively and efficiently takes skill and careful preparation.
While most of us find it difficult to contemplate our own mortality, the fact is that one day we will no longer be here, and estate planning is of vital importance. We owe it to those we leave behind to make the task of settling our affairs as straightforward as possible.
Considering Your Legacy
The very act of having a Will drawn up can be beneficial in that it makes you think about what you have and what you want to happen to it.
Apart from protecting the interests of loved ones, you may want to leave a donation to a cause that is important to you, such as cancer research or an animal sanctuary.
There are many benefits, both financial and emotional, to leaving money to charity in your Will.
Your gift will not only help the organisation’s work to continue, creating a legacy for future generations, but anything you leave to charity is free of Inheritance Tax (IHT).
Avoiding Inheritance Tax
Inheritance Tax is an unpopular and controversial tax, coming as it does at a time of loss and mourning. As property prices make IHT more of a reality for many in the UK, it can have an impact on families with even quite modest assets, including those who have been basic-rate taxpayers all their lives.
(It’s important to note that Scottish law is different and applies to the estates of people who die domiciled in Scotland, which differs from the rest of the UK.)
Payments in IHT recently reached a record high, hitting £5.3 billion in the 12 months leading up to February 2018. That’s a 13% increase year on year. So, any measures you can take to reduce the amount you pay can only be a good thing.
If you leave at least 10% of your net estate to a charity or several charities, then you can cut the rate of Inheritance Tax you pay from 40% to 36%.
The IHT threshold is currently £325,000 – doubling to £650,000 if you have a partner. Leaving money to charity in your Will can be a way of reducing how much of your estate ends up with HMRC.
Where There’s a Will
Legacy income is the largest single source of voluntary income for the charity sector. Last year, nearly £3 billion was donated to worthwhile causes by people as part of their Will.
If you want to be sure your wishes will be met after you die, then a Will is vital.
Whatever your circumstances, we are here to talk through your options with you and guide you in the appropriate direction. If you would like more information or would like to discuss your individual situation with us, then please get in touch.
WILLS, TRUSTS AND TAX ADVICE ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.