Asset Protection - Wills and Trusts
The 2007 Budget ‘doubled’ the Nil Rate band. Broadly this allows the estate of the second to die of a married couple (or a registered partnership) to enjoy their spouse’s Nil Rate Band for Inheritance Tax, to the extent not utilised on the first death, as well as their own. This is often thought of, and presented by the Government, as sufficient protection where their combined assets are less than £650,000 (2 X £325,000 tax year 2009/10).
YourWill would contend that the provision is usually not sufficient to maximise protection of those assets and to give peace of mind. YourWill advise clients to consider more planning.
Most clients should consider what issues could be threats to their assets - property, money and valuable possessions - and so limit the benefit of their estate:
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in considering so-called ‘blood line planning’ (i.e. ensuring that the
maximum benefit from their inheritance is available) the following may
be threats:
- remarriage of the survivor could make the assets part of the assets of the new marriage
- divorce, separation or bankruptcy of any of the beneficiaries could significantly reduce the
benefit available to those beneficiaries and their children -
what would be the effect on the deceased’s assets if the survivor goes
into long term care?
-
if beneficiaries are disabled has the most effective provision been
made?
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if combined assets are in excess of £650,000 has the impact of Inheritance
Tax been minimised and in particular have assets been brought
into the tax net unnecessarily?
- will there be successive liabilities to Inheritance Tax as the assets pass to successive generations?
YourWill have strategies using trusts to minimise the effects of these risks. Contact YourWill to find out more.
