Your children may be grown up and financially secure. If your assets pass to them, you will be adding to their estate and to the IHT which will be charged on their deaths. Instead, you might consider leaving something to your grandchildren, or reducing your taxable estate by helping them out during their education.
Single people might not have given much thought to estate planning. But you should make a will to set out your preferred funeral arrangements, how you want your estate to devolve on your death and who will have responsibility for it.
Your net estate might pass to your parents or your siblings under intestacy rules but would you prefer to leave your wealth to your nieces or nephews?
Another way to build up capital outside your own estate and save IHT is to make regular gifts out of income, perhaps by way of premiums into an insurance policy written in trust for your heirs. Regular payments of this type are exempt from IHT.
Gifts do not have to be in cash. You could save more IHT or CGT by giving away assets with the potential for growth in value. Give while the asset has a lower value so that the appreciation then accrues outside your estate.
Anyone who owns property – a home, a car, investments, business interests, retirement savings, collectables or personal belongings – needs a will. A will allows you to direct by and to whom your property will be distributed after your death. If you die without a will, your property will normally be distributed according to intestacy laws. Assumptions about how these rules work is a very common mistake.
Estate planning should start early in life. If your estate is worth in excess of £325,000 it could be subject to inheritance tax (IHT). Even if it isn’t, careful planning and a well-drafted will can ensure that your assets will go to your chosen beneficiaries.