5 Crucial Things To Consider When Reviewing Your Estate Plan

Have you experienced any life changes like getting married or divorced recently? Or perhaps you are welcoming children or grandchildren into your family? The fact is change is inevitable and it often requires you to adjust your plans.

As you reach new milestones in life, you may want to think about the steps that you’ve taken to get there. In some cases, this means making changes to your estate plan. Your wishes can naturally evolve and change over time and a plan that you made a decade ago might not be suitable now. This is why, if you’ve got an estate plan, it’s important to not forget about it and leave it alone. Instead, you should review it regularly.

Let’s take a look at the top five considerations when reviewing your estate plan.

1.   Your Assets

Any investments, property, businesses or cash savings that you have acquired or accumulated throughout your life, should be included within your estate.

When it comes to reviewing your estate plan, you need to take a look at all your assets and make sure that everything is accounted for. Oftentimes, many people believe they have accounted for everything they own, only to find that sometimes some assets slip through the net. Below is a list of assets from Which that you may want to consider:

• Home or any kind of property

• Stocks, Bonds, and Mutual Funds

• Business Ownership and Assets

• Cash

• Physical Possessions

• Overseas property or investments

• Digital assets and online accounts

Something else you should consider is that assets can increase in value over time. A great example of this is property. According to the Land Registry, between May 2017 and May 2022, the value of the average property in the UK increased by more than £60,000. Asset appreciation much also be factored in when reviewing your assets.

2.   Inheritance Tax

If the total value of your estate is over a certain amount, then you might be liable for inheritance tax. Inheritance tax in the UK has a standard rate of 40%, which can have a significant impact on what your loved ones actually receive if not planned properly.

For the 2022/23 tax year, you’re allowed to pass on up to £325,000 without any inheritance tax. Furthermore, if you leave certain types of property like your main home to grandchildren or your children, you can take advantage of the residence nil-rate band. For this tax year, it’s £175,000.

This means that you could potentially leave up to £500,000 for your loved ones without having to consider inheritance tax. This amount is doubled if you’re in a marriage or civil partnership, because you can pass on any unused allowances.

3.   Does Your Will Reflect Your Wishes?

A will is the only way to ensure that your wishes are carried out when you pass away. As a result, a regular review of your will is vital to ensure your estate plan reflects your wishes as a person.

If you want to make changes to your will, you’ve got two options:

• You could write a new will entirely.
• You can create what’s called a codicil. This is an official alteration to your existing will such as changing the executor or adding a grandchild as a beneficiary.

4.  Have You Planned For Your Later Years?

An important part of any good estate plan is making sure that there is provision for your later years. In some cases, this means appointing a Lasting Power-Of-Attorney (LPA). This is a special responsibility to give somebody else permission to make decisions on your behalf if you are no longer capable of doing so.

An LPA gives someone you trust the ability to make decisions on your behalf if you can’t. An LPA can either cover health or financial decisions. While losing mental capacity isn’t something anyone wants to think about, naming an LPA can ensure a loved one can provide support if it does happen.

5.   Allowances and Reliefs

The government may make changes to allowances and even introduce or remove reliefs.

Ensuring your estate plan reflects the current rules means you can pass on as much wealth as possible to your loved ones. If you overlook this step, you could miss out on opportunities.

It can be difficult to keep up to date with tax changes and understand which ones make sense for you. Working with an estate planner means you can have confidence in the steps you take and know that your plan will accurately reflect the current rules.

Need Help?

If you’d like an expert to review your estate plan, please contact us. We’ll work with you to craft a plan that matches your needs, goals, and estate.