When it comes to will writing, the term ‘estate’ is thrown around regularly – but what is an estate?Start Now
From your home and car to your savings, investments and insurance policies, the value of your estate is calculated with consideration of all of these things, and can determine how much inheritance tax is owed after you pass away.
Some of the assets included in your estate are:
When calculating the value of your estate, it’s not easy to recognise every single source of capital you have to your name, however it is crucial that you do. This is why we recommend speaking to an expert, who will be able to use their vast knowledge and experience to ensure that you don’t miss a penny.
Even if you don’t think that you have substantial savings to your name, it is worth considering how much sentimental value is held within your estate – assets like a family home, old jewellery and family photos can sometimes be far more valuable to your loved ones than they are at face value.
One asset that is often overlooked when calculating the value of an estate is a life insurance policy, which is usually put in place to provide loved ones with financial security – the sum of any potential payment needs to be included as part of your estate and, in many cases, can increase its value considerably.
You must also account for any other sources of income that will become available following your death, such as pension death benefits, mortgage protection policies and death-in-service benefits.
When writing a will, you should make it blatantly clear who you would like to receive each of these death benefits as many of them will be worth more than your current assets.
Valuing an estate can typically take between six and nine months, but can take much longer with more complicated estates – this does not have to be done immediately following somebody’s death, but there are deadlines as to when you can pay inheritance tax.
The inheritance tax deadline is usually within 6 months of the time of death, while you are required to submit the relevant inheritance tax forms within 12 months.
It is important that you acknowledge any potential inheritance tax prior to your death so to be sure that your loved ones are not hit with any unexpected fees in the future – there are various ways in which you can reduce (and in some cases, eliminate) the impact of inheritance tax, which we would be more than happy to discuss with you.
We understand that this can seem complicated, which is why we pride ourselves on offering advice in the simplest terms to help you get your head around inheritance tax.
How you distribute your assets following your death is a matter completely personal to you, but that’s not to say that you have to do it alone.
By using our service it helps to ensure that: