Archive for the ‘Inheritance’ Category

Have You Discussed Your Family’s Finances?

Tuesday, January 19th, 2016

Have You Discussed Your Family's Finances-

Whilst it is easy to be naïve about the eventuality of old age, retirement is an inevitability for everyone.

If you wish to avoid paying high levels of tax and ensure your finances are correctly distributed among the members of your family retirement planning is a crucial step that should not be overlooked.

Even for those who understand the importance of pension planning, research has suggested that as many as 20% of couples over the age of 40 have never discussed their pensions with 49% have no idea about the level of retirement income they can expect once they stop working.

Why is it Important to Discuss Family Finances?

These figures are worrying, especially since families have become increasingly interdependent. Furthermore with the recent shake up to personal and state pensions (new pension freedoms were announced in 2014 and a new flat rate state pension will come into force this April) there is even more reason to discuss your plans for later life to ensure your partner and family receive the correct inheritance once you pass.

Despite these changes to pensions however, research also suggests that there is a reluctance for couples to visit a financial adviser to discuss retirement planning, with nearly two thirds having never met with one as a couple.

What Has Changed in Retirement Planning?

Traditionally retirement planning has focused on the needs of an individual, or a couple. However as families become increasingly interdependent, the situation has become more complicated as people need to factor in siblings, adult children or even parents into their financial plans.

Why Should You Discuss Your Will with Your Family?

One of the key areas that can cause confusion, or even disagreements following the death of a loved one is the Will. By speaking to a financial adviser to draw up a Will, and then discussing your intentions beforehand you will decrease the chance of upsetting arguments when it comes to distributing your estate after you are gone.

For those who have not set up a Will then it is time to stop putting it off. As many as 84% of 18-34 year olds and more surprisingly as many as 35% of over 55s are thought to not have a Will in the UK.

If you pass away without a Will you are considered to have died Intestate and specific rules apply. These rules changed on 1st October 2014 with the main beneficiary of these changes being your surviving spouse/civil partner.

Consider the Tax Implications of Inheritance

If you are planning to leave an inheritance to members of your family it is important to consider the most tax efficient way to do this to ensure that your loved ones do not lose much of your gift.

It can also be a good idea to consider the requirements of your children or younger generations. Attitudes to inheritance have changed in recent years with some younger relatives preferring their older family members fully enjoying retirement rather than struggling in order to leave something behind.

For those already at retirement, you may have already had the all-important family discussion and come to the conclusion that your family will not require as much in inheritance as you originally thought. This information could change your attitude to retirement, perhaps making you consider equity release or other retirement options.

Discuss Your Finances with Family and Advisers

It is understandable that you find the discussion of finances after your death a difficult subject to approach with your spouse, partner or family. However understanding the intentions of those around you is incredibly important.

Coupled with this you should seek professional financial advice from someone who can help you plan both your retirement and passing to ensure your money and assets are properly taken care of.

If you are wishing to speak to someone about pensions, retirement or financial planning please do not hesitate to contact Maxim Wealth Management today on 0141 764 0040 (Glasgow) or 0203 841 9941 (London). Alternatively you can fill in our Contact Form and one of our team will get back to you.

Have You Made Your Will Yet?

Friday, July 31st, 2015

willAfter a lifetime of saving and prudence, you may well have accumulated a great deal of personal financial wealth that will outlast you.

However, without a will to state who will benefit from your wealth, much of the hard work you have put in over the years might be lost.

Dying without a will (being intestate), can present your loved ones with all sorts of difficulties when it comes to dealing with your estate and it presents the tax man with an opportunity to extract wealth from your life savings.

This blog article is a quick guide to making a will and ensuring that your legacy goes to your loved ones as you intend.

A Will To Fit Your Circumstances

Leaving your wealth behind might not be quite as straight forward as you think.

Depending on your circumstances, your age, health and life expectancy and the number and age of your dependents, you might find you have to word your will specifically.

For example, if you have young children or grandchildren, you might want them to inherit your estate at a certain age, or you might stipulate that the money is used for something specific, such as university fees.

It might be that you want to appoint certain trustees or guardians in your will. This might be the solicitor who is drawing up the will or another legally recognised individual who can administer and distribute your estate.

Giving To Charity

If you are leaving an estate to others, you can give part (or all, if you want) of this away to charity.

The amount that you leave to charity will be deducted from your estate before the government calculates the amount of inheritance tax that is due.

If you leave at least ten percent of your estate to charity, the overall inheritance tax rate that is levied will decrease (though not if you take the option of deducting contributions from your estate first, as listed above).

Dying Without A Will

You should probably consider updating your will every five years or so. As your life circumstances, and that of your dependents, changes, your instructions on how to deal with your estate will change as well.

If you don’t have a will and pass away unexpectedly, a relative will have to apply for probate, the legal right to administer your estate.

There are legal processes that also decide who is legally entitled to what if you do die without a will.

Decisions made by the government might not match your own wishes, and they expose your estate to inheritance tax.

A will that is written by an inheritance expert can help avoid large portions of inheritance tax , simply by allocating money and property according to inheritance tax allowances. Anything left to your spouse or civil partner is inheritance tax exempt up to the value of £650,000 (if you both combine your allowances).

Having a will drawn up might cost in the region of £150-£250, but in the long run, it is worth an immense amount more in terms of peace of mind and the knowledge that your life’s savings will go to good use.

Leaving wealth behind is a way in which we leave something of ourselves to future generations and it can be more complex than it appears to be.


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