Estate Planning

Without careful planning, a significant portion of your estate may be lost to Inheritance Tax — currently charged at 40% on the value of your estate above the nil rate band of £325,000. For families in Ilford and East London who own property, savings and investments, the potential IHT liability can be substantial. Proper estate planning, undertaken well in advance, can significantly reduce — and in some cases eliminate — this liability, preserving more of your wealth for your family.

• Inheritance Tax is charged at 40% on the value of your estate above £325,000
• The residence nil rate band provides an additional allowance for the family home
• Without planning, IHT can significantly reduce the inheritance your family receives
• Effective planning can substantially reduce or eliminate the IHT liability
• Planning should be undertaken well in advance to be fully effective
• Changes in your personal circumstances — marriage, divorce, birth of a child — may require a review of existing plans

There are a range of legitimate and effective strategies available to reduce the IHT burden on your estate. The most appropriate strategy — or combination of strategies — will depend on the nature and value of your assets, your family circumstances, and your personal wishes. Our solicitors will work with you to understand your objectives and advise on the most effective approach for your situation.

• Making tax-efficient gifts during your lifetime — using the annual exemption, small gifts exemption, and normal expenditure out of income rules
• Potentially exempt transfers — gifts that fall outside the estate if you survive seven years
• Trusts — discretionary trusts, life interest trusts and bare trusts for tax planning purposes
• Using the residence nil rate band effectively — ensuring the family home passes to direct descendants
• Business property relief and agricultural property relief where applicable
• Charitable giving — reducing the rate of IHT to 36% where 10% or more of the estate is left to charity
• Equalising estates between spouses to make full use of both nil rate bands
• Reviewing existing life insurance policies and ensuring they are written in trust

Trusts can be a highly effective tool in estate planning, allowing you to transfer assets to beneficiaries while retaining control over how and when those assets are used. A discretionary trust gives the trustees flexibility to decide how to distribute income and capital among a class of beneficiaries — useful where the needs of beneficiaries may change over time. A life interest trust can ensure that a surviving spouse or partner is provided for during their lifetime while protecting the underlying capital for children from a previous relationship. Our solicitors will advise on the most appropriate trust structure for your circumstances.

• Discretionary trusts — flexibility for complex family situations
• Life interest trusts — providing for a surviving spouse while protecting children's inheritance
• Bare trusts — for straightforward transfers to children or grandchildren
• Trusts for vulnerable or disabled beneficiaries
• Pilot trusts and deed of variation to redirect an inheritance
• Ongoing trust administration advice