COVID-19 Q&A | Sintons | Wills, Trusts & Estates

During these unprecedented times, where the situation is changing on a daily basis, we are aware that individuals and business owners will have many questions and uncertainties about how these developments impact on them.

Here, through a series of Q&A with expert lawyers from across our firm, Sintons hopes to be able to answer some of those pressing questions, and provide some certainty and clarity for people who are unsure how to proceed.

I am keen to plan for the future of my family and want to protect my estate for future generations as much as possible. My estate is of significant value – what steps do I need to take?

There are many reasons why you should seek advice regarding succession planning, namely to ensure that your estate is preserved as far as possible for future generations of your family.

The immediate step is to ensure that you have a will in place, and that it is up to date. If your financial or family circumstances have changed since you last made your will, you should review it with your legal advisor to ensure that it still works for your circumstances. The rules regarding inheritance tax have changed significantly in the last 15 years, and many couples who are married or in a civil partnership are particularly encouraged to consider their wills in light of these changes.

Many clients are becoming increasingly concerned about the need to protect their estate from future residential care fees. Of greatest concern is the need to preserve the family home which is, for many, the most valuable asset in the estate. A popular solution for many clients is the use of a trust within their wills. This means that the half share in the property owned by the first to die will pass into the trust and cannot be assessed by the Local Authority for care home purposes should the survivor be in or later move into residential care. This can be a very effective way of preserving the property against future care home fees but, like with any trusts, the advantages and disadvantages should be discussed with a professional to ensure it is right for you.

You may wish to give away your home to your children or grandchildren during your lifetime by way of an outright gift or by using a trust. It is very important that you seek legal advice before taking any steps to gift your home. As well as hidden taxation consequences, any lifetime gift may be deemed to be a deliberate deprivation of assets by the Local Authority. This essentially means that if you have given away assets for the sole purpose of avoiding the payment of privately funded care fees, you may still be deemed to own the asset in question when the Local Authority are carrying out a funding assessment. We can ensure that you are fully informed of the merits of any lifetime gifting so that you can understand the potential implications for you and your family.

If you have young children or grandchildren you may wish to start providing for them now rather than on death. To ensure that your wealth is preserved for their benefit, and their benefit only, you could consider setting up a trust. Trusts for young children can ensure that the money is managed and invested for the benefit of young children, particularly if you are concerned about their maintenance and education. As with most things, there are taxation consequences in setting up trusts so it important you consider these carefully with your legal advisor.

Finally, if your estate is of significant value we can advise you on your potential inheritance tax liability and the options available for you to reduce any tax liability. This may involve discussions regarding lifetime gifting or use of inheritance tax exemptions.

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