How To Preserve Your Estate

How To Preserve Your Estate

Preserving your estate is just as important as building it

Preserving your estate is just as important as building it up. You spend your whole life accumulating wealth, passing it on efficiently is just as important. You have to ask yourself, what will your legacy look like when you pass on?

Inter-generational planning allows you to put financial safeguards in place to benefit your children later in life, as well as potential grand kids, but it is critical to begin preparing early.

When handing on your wealth, you may wish to retain some control. You may want your money to be used for a specific purpose, such as paying for school or university tuition or a deposit on a first home. You may also want to ensure that your money stays in the family.

Without proper planning, all of this is left out of your control. There’s also the massive elephant in the room that is inheritance tax. Inheritance tax is one of the biggest issues you face when looking at preserving your estate. We’re going to look at some brief strategies and plans that can leave you better prepared to pass on your wealth.

Strategies for preserving your estate

The key part of a good strategy is creating a detailed plan outlining how you want all of your wealth and property transferred after your death. It entails putting in place documents to guarantee that your assets are transferred in accordance with your preferences. Everything you possess is included in your estate. Savings, investments, pensions, real estate, life insurance (unless written in a suitable trust), and personal items are all included. Debts and obligations are deducted from the overall asset value.

Writing a will

A Will is one of the most crucial components of an estate strategy. First and foremost, a Will gives you power. You get to decide who gets what from your estate and who doesn’t. You can also choose who will manage your affairs after your death. If you do not prepare a Will, the intestacy rules will determine who receives your assets – which might have unfavourable outcomes.

Planning for inheritance tax

When a person dies, the value of their estate may be subject to Inheritance Tax. If you live in the United Kingdom, your estate comprises everything you possess, including your house and any trusts in which you have an interest. Inheritance Tax may be levied at a rate of 40% on the value of anything you own above the ‘nil-rate band’ (NRB). The nil-rate band is the amount of your estate that is exempt from UK Inheritance Tax.

Make gifts whilst you’re still alive

The government determines the amount, which is presently £325,000 and is slated to remain frozen until 2026. Furthermore, starting of April 6, 2017, if you leave your house to direct lineal descendants, the value of your inheritance before taxation has increased due to the inclusion of the’residence nil-rate band’ (RNRB). The RNRB for the fiscal year 2022/23 is £175,000. After creating an estate preservation strategy, keep in mind that the process isn’t simply about passing on your possessions when you die. It’s also about analysing your money right now and making the most of your assets while you’re still living.

Investing into IHT exempt assets

Another approach for experienced eligible investors to potentially reduce Inheritance Tax costs is to invest in Inheritance Tax exempt assets. These schemes are more risky and hence not appropriate for all investors; any investment decisions should always be made with the assistance of competent financial counsel. The Enterprise Investment Scheme is one example of this (EIS). Because the qualifying trades for EIS purposes are extremely similar to those that qualify for BR, the great majority of EIS-qualifying investments qualify for 100 percent Inheritance Tax exemption under Business Relief (BR).

Keeping life insurance within a trust

One of the greatest methods to secure your family’s future in the case of your death is to get life insurance through an appropriate trust. Your life insurance policy is a valuable asset, and by putting it in trust, you may choose how your beneficiaries get their inheritance. The profits of the policy can be given directly to your beneficiaries rather than to your formal estate, and so will not be included when calculating Inheritance Tax.

Prioritise the power of a pension

For most people, passing wealth down through the family is a crucial element of their estate planning process. Pension funds are normally exempt from Inheritance Tax if the trustees/administrators of the scheme have discretion over the distribution of death benefits.

You should keep in mind that any money you withdraw from your pension becomes part of your estate. As a result, it may be liable to Inheritance Tax. This includes any tax-free cash allowance that you may not have used. Some traditional pensions may be included in your inheritance. As a result, it’s critical to determine if Inheritance Tax will apply to your funds.

The exemption of pensions from Inheritance Tax provides a variety of planning options. Most clearly, if your non-pension assets (such as funds in your Individual Investments Accounts) are likely to saddle your heirs with an Inheritance Tax liability, it may be prudent to prioritise pension plans for future savings. You may even be able to transfer existing funds and assets into your pension plan to avoid Inheritance Tax.

Getting professional advice on wealth preservation

At the end of the day, this is just a snipped when it comes to the full topic of wealth management. There’s many caveats and potholes that will be specific to certain scenarios and also specific client’s ambitions for their estate. Preserving your estate is never the same from one to the next. This is why it really requires bespoke advice when it comes to this touchy subject. But it is well worth seeking out as it can save you a lot of capital down the line.

The best route to take is to have a free consultation with our experienced financial advisor, Tony. He’s managed clients estates over a 35 year career in the business. This puts him in a unique position in that he has seen a wide range of diverse client cases. His experience is vital when it comes to preserving your estate and you should speak to him today.

Regulatory Statements

Equity Release

Equity Release plans are not right for everyone and it is important that you fully consider your options and receive independent financial advice before making a decision. It is also important that, if you do decide to use an equity release product, you choose one that meets your needs.

Remember that taking an equity release plan is generally a long term option. However, there are flexible plans available that may fit your varying needs and some will allow you to repay in the future without penalties.

Buy to Let Mortgages

Some Buy to Let Mortgages are not regulated by the FCA.




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Our services relate to certain investments whose prices are dependent on fluctuations in the financial markets outside our control. Investments and the income from them may go down as well as up and you may get back less than the amount you invested. Past performance is not a guide to future performance.

True Advice Financial Services is a trading style of TA and SE Hollom Ltd. Which is an Appointed Representative of New Leaf Distribution Ltd. Which is authorised and regulated by the Financial Conduct Authority : Number 460421.

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