Protecting family assets

Estate planning to protect your assets - When you have worked hard throughout your life to acquire personal assets, it is important to plan how best to keep and use this wealth in later life and ultimately protect it for your family.

Nearly everyone has estate and assets, no matter how large or modest, that they would like to protect and pass on to future generations.Nearly everyone has estate and assets, no matter how large or modest, that they would like to protect and pass on to future generations.

Estate planning to protect your assets can help to avoid threats to your assets.

Threats can include: 

• Inheritance tax
• Capital Gains Tax
• Care costs
• Business failure
• Forced inheritance, such as a child’s Legal Right or a cohabitant’s claim
• Family or matrimonial issues

Effective estate planning can involve the use of fairly complex tools, such as Trusts. 

Other planning vehicles, like gift making, can be simple and straightforward. An up to date Will might be all that is required, or a Power of Attorney. We can offer straightforward, practical advice tailored to suit your particular circumstances.

Particular risks might include:

Inheritance Tax 

Inheritance tax is, broadly speaking, paid when someone passes away and leaves assets to others either under the terms of their Will or as a result of the rules of intestate succession. At present, the first £325,000 is free from inheritance tax, and any value over that amount is taxed at the flat rate of 40%. There can be an exemption to Inheritance tax, mainly where one spouse inherits from another, or where assets are left to charity. You could be very surprised when you discover just how much tax may need to be paid from your estate. 

A real problem in reducing the liability to tax is that you often need all of your assets to make sure you go on living comfortably throughout your lifetime. However, it is often possible to greatly reduce, or even remove, the potential tax liability.

Care costs 

With more and more people living longer, you or a member of your family may need care at home, or residential or nursing care. Every year tens of thousands of people in Britain fear that they might have to sell their homes to pay the fees for their long-term care – indeed the cost of funding long-term care can have a more devastating effect on your assets than any form of tax. With careful planning it is possible to ensure that you leave as much of your estate as possible to your dependents.

Business risk

When a family business runs into problems there is enough to think about without worrying about the effect this may have on the assets that are held outside the business. The laws of bankruptcy always govern these situations, but with proper planning before any problem arises, you could protect your assets from creditors if the business faces difficulties.

Succession planning

Making sure the family business passes on to the right people can be one of the most difficult paths to navigate within any family. You have to consider who should take over the business and when, and also the claims that other members of the family will have on your estate. If you do not deal with this area properly, part of the family business may have to be sold to fund claims made by other members of the family. You may also want to place business assets in trust for your children until they reach a certain age or the trustees decide that the time is right for them to receive the assets.

Relationship breakdown

Dividing a couple's assets can lead to a range of issues. There are often questions about what makes up the matrimonial 'pool' of assets and what share each person is entitled to. It is increasingly common to deal with these issues in advance. You can do this either through a pre-nuptial or post-nuptial agreement or by using trusts. It is then often possible to make sure that family assets are not at risk when a relationship breaks down. 

Contact Mark Lister and his team today for assistance with protecting family assets.