Family Affair

More than ever, planning for yourself, your children and your grandchildren ́s future is vitally important. Kevin Birtles, Managing Partner, of Private Client Consultancy explains how you can solidify your financial goals for a brighter tomorrow. By Rachael Bryant

Many would agree that the past few years have been a life chapter we will never forget, a moment in time that caught many of us off-guard, leaving us feeling vulnerable and uncertain about the future both personally and financially. As a result, many of us have begun giving serious thought as to how we can make positive changes, for today, and for all our tomorrows. The pandemic showed us just how unprepared we can be for a crisis, and while financially everyone is different, we should be asking ourselves: “Am I financially prepared today for my family’s future?”

However, you accumulated your wealth, be it earned, inherited, or whether you’ve made some great investments, the most important aspect you will want to ensure, is that as little of it as possible ends up in the hands of the tax authorities. At Private Client Consultancy, the goal is to ensure that your money can be enjoyed to the fullest by you and your family.

Estate planning is a fundamental part of financial planning which affords you control over what happens to your assets when you pass away, no matter how much wealth you have accumulated. Not only does an estate plan help to ensure that those who are important to you will be taken care of when you’re no longer around, but it can also help ensure that assets are transferred in an orderly manner and that inheritance tax liabilities are minimised.

One of the most important components of an estate plan is a will. First and foremost, a will puts you in control. You choose who will benefit from your estate and what they are entitled to. The law (without a will in place) sets a hierarchy of who can handle your financial affairs after death. That may lead to problems if the person is not suitable because of age, health, geographical location, or any other reason that maybe applicable.

Your estate consists of everything you own, including savings, investments, pensions, property, life insurance, and personal possessions. A lasting power of attorney (LPA)can be created for property and financial affairs, as well as health and welfare. These arrangements can be put in place at any time, and it’s important to consider setting them up, no matter what age you are.

Once the will and the LPA are sorted, the next step is to think about inheritance tax planning. Whenever someone dies, the value of their estate may become liable for inheritance tax. If you are UK domiciled, your estate includes everything you own. Inheritance tax is charged at a rate of40% on the value of everything you own above the nil-rate band (NRB) threshold. The NRB is the value of your estate that is not chargeable to UK inheritance tax. This amount is set up by the government and the NRB is currently £325,000. In addition, since 6 April 2017, if you leave your home to direct lineal descendants, the value of your estate before tax is paid will increase with the addition of the residence nil-rate band (RNRB), this is currently £175,000, but can be significantly reduced based on your global wealth.

When developing an estate plan, it’s important to remember that the process isn’t just about passing on your assets when you die. It’s also about analysing your “now” and potentially making the most of your assets while you are still alive. With lifespans increasing, we need to be prepared to live longer without an income from employment. Therefore, structured financial planning is a continuous process, and it’s easy to fall off track if you don’t have a plan in place. It can also be difficult to balance your retirement aspirations and finances alongside your other goals, whether that be buying a house, sending your children to university or simply supporting those in need. Private Client Consultancy want to work with you to understand your objectives and then show you the best way to achieve those without jeopardising your current needs.

Get in touch with us now to book a complimentary consultation. Visit us at www.pccwealth.com or send an email to private@pccwealth.com for Managing Partner Kevin Birtles or Senior Wealth Consultant Karen Blair today and get your planning started.