As Benjamin Franklin once said, “Nothing is certain except death and taxes”. This still rings true today and so here are some steps that you can take during your lifetime to help plan for these certainties.
Make a Will
If you do not have a valid Will, the rules of intestacy will dictate who administers your estate and how it will be distributed. Writing a Will gives you control over these decisions. By choosing the most appropriate people to act as your executors, the administration of your estate can begin swiftly and without unnecessary delay. Once you have made a Will, make sure that you let your executors know where it is stored and keep it up to date.
Organising your paperwork
After you die, your executors will be required to obtain valuations of your assets, calculate any inheritance tax and file these details with HMRC before they can apply for the grant of probate. It is therefore helpful to prepare a list of financial assets and professional advisers for your executors. Digital assets should not be overlooked; many social media accounts can be memorialised so that content can still be viewed after the holder’s death. It is possible to include a digital assets clause in your Will nominating an individual to deal with your digital assets.
You should also keep clear records of gifts made during your lifetime as these may need to be reported to HMRC. Gifts made from surplus income are not subject to inheritance tax and if you intend for your estate to benefit from this exemption, your executors will need to submit full records of your annual income and expenditure to HMRC for the seven years before your death.
Make sure that you have completed any beneficiary nomination forms relating to your life insurance, or pension, as these funds will usually pass in accordance with such nominations and not your Will.
Access to funds
Once banks have been informed of your death, your sole accounts will be frozen and the funds cannot be accessed until the grant of probate is obtained, which could be many months later. Any accounts in joint names will, however, pass automatically to the surviving joint holder meaning they will still be able to access those funds.
Also consider using a nominee service for any shareholdings so that they do not have to be re-registered in the names of the executors or the beneficiaries after the grant is obtained.
Our team can advise on all aspects of pre-death planning and please get in touch if you need further advice.