We spend a huge amount of our lives working hard in the hope that we leave something significant to our families, so how can you ensure that happens? We’ll take a look at five simple ways in which you can protect you family estate in your senior years.
When we imagine growing old, we don’t always imagine worst case scenarios. We like to believe we’ll always have control over our lives, but what happens if we suddenly don’t?
When it comes to protecting assets, you can help protect what’s yours by taking out a power of attorney whereby you nominate a person to make decisions on your behalf should you no longer be able to do this for yourself.
If you have not done this and you subsequently become unable to make decisions for yourself, you can ask a solicitor to set up a lasting power of attorney which performs the same function. These are just some of the ways you can protect your family estate, so keep reading to hear some more…
Implement Your Wishes Early on in Life
In our younger years, it’s relatively easy to keep control of all aspects of your life, including your finances and assets. However, as we get older, the risk of conditions such as dementia may impair our judgement when it comes to making decisions about our estates.
This can lead to some significant problems in the event of your death, as there may be squabbling and disagreement about your actual intentions. It’s best to be honest with yourself early on in life by thinking about the worst case scenario so that you can put your intentions in place.
Write a Will
Making a will is an incredibly important way of protecting your estate, and it’s never too early to do so. A will is a legal document in which you detail who you wish to leave your money and belongings to when you die.
Although you can draw this document yourself, it should then be notarised by a solicitor and a copy of this on file will be kept for you. This can prevent anybody tampering with the copy that you hold yourself, in order to gain your assets.
While you may already have created a will, many people make the mistake of shoving it into a drawer or file and forgetting about it. In order to make sure that your bequests are relevant and accurate, you should get into the habit of regularly reviewing your will and amending it accordingly.
Failure to do this can sometimes lead to problems. For example, if you have bequeathed a financial gift to a friend who has since passed away, your hard-earned cash may end up in the hands of that friend’s next of kin.
Take Out Life Insurance
Taking out a life insurance policy is an extremely sensible idea, as this will help to pay for your funeral costs, as well as allowing you to leave some cash for your loved ones.
If you place this within a life insurance trust, this effectively separates and protects your life insurance sum from your other assets. To do this, you will need to appoint a trustee of the trust and within the document, name the beneficiaries of the trust, and the amount of percentage to be paid to each.
Use Cash Gifts to Avoid Inheritance Tax
When we pass away, the money and assets that we leave to our beneficiaries is subject to inheritance tax if the total of the assets are over £325,000 (for a single person) or £650,000 if you are married or widowed. This means that the taxman will take a chunk of the value before it is passed onto your loved ones.
Although there is no way of avoiding inheritance tax altogether, there is some good news. Each tax year, you are permitted to make a cash gift of up to £3000 to anybody that you choose without the need to pay inheritance tax. As a result, a lot of people choose to make yearly gifts to their children and grandchildren to help them make the most out of their bequests.
You may also be able to take advantage of the new main residence nil rate band which has a value of £175,000. However, this only applies if you are passing a property onto your children, grandchildren, or another lineal descendant.
Invest Your Money
In 2022, putting your cash in a savings account is almost considered to be outdated. Instead, lots of people choose to invest their money with the help of a financial advisor.
This can be a great way protect your estate as, with a skilled investor, your funds will continue to grow, and your beneficiaries can choose to either withdraw the capital as cash or let the advisor continue to invest it on their behalf.
Don’t Let Your Family Estate Fall to Strangers,,,
We all work hard for our money and possessions and the last thing we want is to see them disappear or fall into the wrong hands. By following the tips in this article, you can ensure that your assets will go to the right people after your death, even if you’re no longer in a position to make the necessary financial decisions for yourself.
Please be advised that this article is for general informational purposes only, and should not be used as a substitute for advice from a trained Wills and Probate professional. Be sure to consult a Wills and Probate professional if you’re seeking advice about your estate. We are not liable for risks or issues associated with using or acting upon the information on this site.
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