With more than two decades of experience of the finance sector, Moize Goulamhoussen works as a Senior Portfolio Manager and Wealth Advisor, helping clients to protect and grow their wealth. This article will look at estate planning, providing an overview of measures benefactors can take to protect their legacy and ensure it passes to their intended beneficiaries as smoothly and efficiently as possible.
Estate planning is a process that requires the benefactor to assess their assets and decide how they are to be managed and distributed following their death. Estate planning is incredibly important in terms of protecting assets for intended beneficiaries, helping benefactors to understand how much inheritance tax may be due, and making the lives of executors and loved ones better following the benefactor’s passing. For high-net-worth individuals, it is prudent to consult a solicitor or financial adviser for expert estate planning advice.
The estate planning process involves assessing the benefactor’s net worth by adding up all assets then subtracting all liabilities, such as their mortgage etc. The benefactor will then need to consider who should receive what following their death, for example their money or their home. Benefactors can set conditions beneficiaries need to fulfil before receiving their inheritance, such as reaching a certain age.
Integral aspects of estate planning include:
- Making a list of all assets
- Making a list of all liabilities
- Making copies of those lists
- Seeking professional financial and/or legal advice
- Reviewing retirement accounts
- Reviewing insurance and annuities
- Considering consolidating accounts
- Setting up joint accounts
- Choosing an executor
- Will writing
- Reviewing documents
- Sending a copy of the will to the executor
- Completing other financial documents
- Considering other savings vehicles
Individual estates can vary hugely from one to the next. In some instances, estate planning can be an incredibly complex task. The estate plan should include provisions for the property, for example, granting a right of residence or stipulating a beneficiary. Benefactors also need to consider what should happen to their other assets, such as investment portfolios, bank and building society account balances, and insurance policies that may pay out following their death. They can also use estate planning to make provisions for their personal possessions, such as cars, jewellery, antiques, art and anything else of value.
Estate planning is not the remit of the ultrawealthy but a tool for everyone. A will is one of the most important documents an individual will sign in their lifetime. Nevertheless, will writing is just one aspect of estate planning, a process that enables benefactors to preserve family wealth and provide for their loved ones.