Thinking Ahead


An affordable will and estate plan for you and your family

Failing to plan your estate carefully could cost you dearly. Most people understand the importance of having a will and estate plan, yet despite this, 60% of the UK population still relegate estate planning to the ‘too difficult’ pile and never create a will. If you have assets over £1 million, in addition to any interest in pensions funds or life insurance policies, it is even more critical.

With inheritance tax charged at rates of 40% (for estates over the value of £325,000), property prices high and general political instability, planning the future has never been more important to ensure that those you leave behind are protected, both financially and otherwise.

Whether you’re worried about who will look after your children should you die prematurely, your children’s financial future, protecting their inheritance from a possible divorce, your own future health and ability to make decisions or your ageing parents, we can help.

We have helped thousands of clients with their estate plans and so are well versed to advise on which plan is likely to work best for you and your particular circumstances. And because we know that this is not something you want to dwell on, we have made the process as quick, simple and affordable as possible.







Protecting your wealth

Importance of wills


Inheritance tax applies to the worldwide estate of anyone who dies domiciled in the UK. At 40% of any value of an estate over £325,000, it is, potentially, a substantial liability.

However, assets given to a spouse or civil partner are exempt from inheritance tax (IHT) and the IHT free band is now transferable between partners. Taken together, these two features can be used to real advantage, achieving significant tax savings for your family and safeguarding your wealth.

So what does this mean in practice?

Assuming a straight-forward scenario, we will look at a married couple with total assets of £2 million. The husband’s portion of the estate is equal to £1.5million of their total assets.

Without a will

On the husband’s death, his wife receives only £250,000 outright and the income from another £625,000 with the capital held in trust. Any children will receive the rest – ie £625,000 – outright when they reach 18. There is £120,000 IHT to pay on the husband’s death. The widow may therefore not have enough capital for her needs and she may find her children own a share of the house – leaving her in a very insecure position.

With a will

The husband leaves everything he owns to his wife and dies first. Under the current regime there is no tax at all on his death and the widow has the security of owning the family home, and all other assets, outright. Further, their children will be able to claim both tax-free bands on her death. IHT will only apply to the portion of the combined estate over £650,000.

Protecting your future


Your estate plan should also deal with the impact for you and your family of any decline in your mental or physical condition in years to come. You may have heard of Lasting Powers of Attorney (LPA), which have been developed to help you and your family manage the consequences of such an event. By putting LPAs in place, you can be assured that your assets, medical treatment and living arrangements will be administered by someone of your choice.

Property and Financial Affairs LPA

This covers decisions affecting your property and finance, allowing you to predetermine who should act on your behalf should the worst happen and avoiding costly and time-consuming applications to the Court of Protection.

Health and Welfare LPA

This covers medical and other decisions affecting your general welfare and again allows you to choose who should make these on your behalf. This is an emotive area, but the Withers team can help you identify suitable candidates to act as your Attorney, as well as defining limits to their powers and building in additional safeguards, where appropriate.

Living Wills

Living Wills (also known as Advance Decisions or Advance Directives) enable you to specify now what medical treatment you would and would not be prepared to accept should you be unable to give or refuse consent at the time. Whilst Living Wills are an alternative to Health and Welfare LPAs, they are limited in scope only to cover the particular situations specified in the Living Will itself.

For more in depth information on these, please see the articles listed below.

Lasting powers of attorney

Read more

Lasting Powers of Attorney — Health and Welfare

Read more

Living wills

Read more

Complete a will questionnaire

To assist you in the process of making the most appropriate estate plan, we have put together a simple questionnaire, which can be downloaded. Please complete and return to: Client Services Team, Withers LLP, 16 Old Bailey, London EC4M 7EG or email to enquiries.uk@withersworldwide.com. Once received, a member of our team will be in touch to discuss how we can help.

Looking ahead

Typical costs


To give you an indication of our costs, we set out below what they would be in a normal scenario. The figures are of course estimates and may vary depending on your particular circumstances, such as where you own property overseas or should you or your partner be domiciled abroad.

Description

Cost (excluding VAT)

Description

Single will

Cost (excluding VAT)

£1,800

Description

Similar wills for spouses or civil partners with children

Cost (excluding VAT)

£2,950

Description

Property and Financial Affairs LPA

Cost (excluding VAT)

£1,000

Description

Health and Welfare LPA

Cost (excluding VAT)

£1,000

Description

Living wills

Cost (excluding VAT)

£400

Description

IHT planning for pensions / life insurance

Cost (excluding VAT)

£1,500 if a trust is required (initial advice is included in the estimate for wills above)

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