What is estate planning?

Estate planning is an essential part of broader, longer-term financial planning – especially if you are a high-net-worth individual. It ensures that your assets, investments and wealth pass on to loved ones as you would want them to. But effective estate planning does not just have to focus on what happens after you pass away. It is also about enjoying the here and now.

At Saunderson House, our estate planning specialists can help you in various ways – all with the aim of delivering peace of mind and the satisfaction of knowing that your wishes will be fulfilled taking account of current law, custom and practice, while being mindful of the various factors (such as IHT, family, charitable donations and longer term legacy) you will need to weigh up.


How Can Saunderson House help?

Estate planning is a wide-ranging area. While the more obvious conversations will be around the implications of failing to plan, some concepts aren’t as easy to quantify. But it does not mean that these concepts are any less important. In short, estate planning is ensuring that your assets and responsibilities pass onto others in line with your wishes when you die.

Your adviser’s role is to help you to develop estate planning and wealth preservation strategies and solutions contained within one robust, bespoke plan. Your adviser will also regularly monitor and review that plan so that it remains fit for purpose.

Estate planning is based around your unique situation and goals. It is guided by your priorities – from reducing your Inheritance Tax bill to the level of control that you wish to keep over assets that are gifted away. In this sense, estate planning and planning is ongoing. It emphasises a need to establish a strategy that is both strong and adaptable to changes.

What is Inheritance Tax? 

Inheritance Tax (IHT) is often (but not always) a main concern when it comes to estate planning in the UK. High-net-worth individuals are especially at risk of leaving behind a large IHT bill.

If your estate is worth more than £325,000, the amount above that threshold (Nil Rate Band) is taxed at 40%. It could mean that a portion of what you hoped will pass to your family instead ends up going to the taxman.

How to plan your estate 

No matter your objectives, creating a complete estate plan brings clarity and assurance to your financial matters. It can be hard to know where to start. This is where Saunderson House comes in.

Our expert advice helps you to make sense of your estate planning objectives in the first instance. From there, your adviser will work with you to develop a unique plan to achieve them. This plan will be extensive in scope and detailed in execution – leaving as little to chance as possible.


How our estate planning services can help you

Your estate planning financial adviser will do more than help you to create a tailored plan. We keep you informed about changes to it. We will also challenge your thinking as an objective independent party to ensure that your goals are achievable, including lifetime gifting and an equitable distribution of your estate.

We can support you in ensuring that your estate is in order from an administrative perspective. Our service covers all aspects of Wills and estate planning. Do you have an up-to-date Will? Is there a Lasting Power of Attorney in place? Will you need a Guardian?

The Saunderson House Wealth Ecosystem  is a comprehensive panel of fellow leading professionals in their fields. Their role is to assist with establishing the aforementioned documents. We liaise with all necessary parties so that all relevant aspects of your estate are considered and complementary. In doing so, it eases the administrative burden on the executors of your Will.

Estate planning is your chance to choose who your wealth goes to. In some cases, you can also see what your money is spent on during your lifetime. Above all, we help to make your goals as simple, effective and tax-efficient as possible.


Who should consider estate planning?

It might not always be obvious but many of us will have at least some level of wealth that we will wish to pass on to our loved ones. You should be looking to consider estate planning as soon as your wealth exceeds £1m – or £2m if you’re a couple. This includes the value of your property.

Any inheritance that you receive, for example, can impact your own estate plan. Will it be necessary to skip a generation and pass any inheritance directly to your children to avoid increasing your IHT bill? Do you need to look after the financial needs of someone who relies on you? Have you thought about which Guardians you wish to look after your if the need should arise?

These are all things with which our estate planning services will be able to help you.


Why choose Saunderson House? 

Our service is focused on you – whether it’s estate planning for high-net-worth families or taking care of the future financial needs doctors, accountants, lawyers, and more. Your adviser will work both with and for you in constructing a plan that reflects your wishes. It is all part of our commitment to creating strong client-adviser bonds – where the outcome is always one that you want to achieve.

So, why would you trust us with your trust and estate planning needs?

  • Our advisers offer a detailed report on your current position. We can advise on what you need to do to stay on top of the rules and regulations from a UK IHT perspective.
  • Our unique Wealth Ecosystem takes a holistic approach to the estate planning process – leaving nothing to chance in the pursuit of your financial aims.
  • Corporate Chartered Financial Planners status reflects our belief in upholding the highest standards of knowledge and ethical practice when advising you.
  • We are an award-winning financial and estate planning company. It is recognition of all the work that we do to support our clients with effective wealth preservation solutions.

For more information or for a complimentary consultation, please contact us today and see how Saunderson House can help with your estate planning needs.


Estate Planning: Frequently asked questions 

When should you start estate planning?

You need not wait until later life when there are elements you can start on now.

Estate planning can be tied in with life events such as building assets in your own name, getting married, having children, buying property in the UK or abroad, losing a loved one or getting divorced. These can all add different considerations and complexity to your estate.

You will also need to revisit, add to and update your plan accordingly with each new life event.

How can estate planning reduce IHT liabilities?

IHT is applied if the value of your estate exceeds any available allowances and exemptions. As a first step, the allowances to consider are the nil rate band (£325,000 each) and the residence nil rate band (up to £175,000 each).

Estate planning can help to reduce IHT in several ways. Some common ways to do this are:

  • Keep an up-to-date Will: Your Will is the document that defines who you want to inherit your estate. If you die without one, the rules of intestacy are applied. This will have administrative (and financial) ramifications. Unmarried couples do not automatically inherit assets from a partner (unless a civil partner), for example.
  • Use of pensions: Pensions generally fall outside of your estate for IHT purposes. If you are building wealth, pension contributions can therefore reduce the value of an estate. Once you come to draw from your portfolio, you should draw from defined contribution pensions last for this reason. You should also nominate a beneficiary against your pension – and keep this up to date through an Expression of Wishes form.
  • Make lifetime gifts: By passing on your wealth during your lifetime, you can also lower the value of your estate and the IHT due. Our advisers can formulate cash-flow forecasts to help to demonstrate when you might be able to start gifting assets. Importantly, we can also show how much you might be able to gift without impacting your standard of living.

Annual exemptions and allowances, charitable exemptions or ‘normal gifts out of income’ exemptions are some ways in which you can immediately reduce your estate’s value. ‘Potentially exempt transfers’ can become exempt from IHT if the donor survives for seven years after making the gift. Some of our clients like to retain a level of control over their gifts and decide to use estate planning trusts.

  • Make IHT-efficient investments: Certain investments qualify for reliefs and can lower your IHT exposure. Our financial planning advisers can help you to decide which investments are appropriate for you. Meanwhile, our Investment Team undertake extensive research on different IHT-efficient investment options.
  • Spend more: If you lower the size of your taxable estate, the chances are that you will pay less (or no) IHT. With that in mind, some clients decide to spend more during their life as part of their approach to estate planning. You may decide, for example, to go on more family holidays with your children or grandchildren to create memories.
  • Charitable giving: In addition to spending more (as above), you may also decide you wish to leave a charitable gift behind. By gifting 10% of your estate, you can lower the amount of IHT due to 36%.
  • Protection policies: Individuals and couples can use protection policies in trust to pay some or all of any IHT bill due in the event of their death. Bear in mind, however, that this comes with a commitment to pay premiums on a long-term basis.

How can cashflow planning help with estate planning?

Lifetime gifts or spending more can be an effective part of estate planning. A key consideration when making these decisions, however, is affordability. To help clients in their decision-making process, we integrate a market-leading cash flow planning tool into our services.

Cash flow planning is becoming an increasingly essential part of financial advice. It helps clients to see if they are on track to meet their long-term estate planning objectives. It also highlights any further planning opportunities that may exist.

In the first instance we create a personalised cash flow plan and then we model alternative versions, too. The aim? To see if you can afford your anticipated lifestyle plus make gifts as part of your estate planning strategy.

I have assets in multiple countries – what issues could I face?

You should establish an English Will. But you may also need separate Wills to deal with foreign property. This can even include assets held in different parts of the UK, with English and Welsh law differing from the law of Scotland.

If assets are held in multiple countries, you must keep abreast of all changes that could impact them. It is important to note that each country might also have its own rules of succession. In addition, you may also have more complex structures in place such as offshore bonds.

Such bonds often come with extra estate planning considerations. You might need to establish an additional probate specifically for them.

One other potential issue is the larger administrative burden – including language barriers and varying service standards. This may also be relevant for the probate process, which is likely to be different than the process in England.

What issues could I face as a high-net-worth individual?

For high-net-worth individuals, there are several issues to factor into estate planning activities:

  • Your assets are likely to exceed the nil rate band – and that excess is liable to IHT. If property assets in an estate is worth more than £2m, you also lose entitlement to residence nil rate band.
  • High-net-worth families can often have assets in multiple countries. This can be complex in itself, but your estate can also be affected by residency.
  • If mitigating your IHT liabilities is important, you may face decisions on when the right time to make gifts is – and how large those gifts should be.
  • You are likely to be particularly sensitive to any changes in legislation that affects IHT – from the current thresholds to any reductions, exemptions, or removals.
  • If your assets are liquid, it can be difficult to sell them quickly or easily without recording a sizeable loss in value. As such, your estate may not be able to cover the IHT bill. This is where protection policies in trust can be beneficial as part of an estate planning.


What our clients say

Ian McNally, Director
“We are extremely pleased and grateful to be advised by your team and we will have no hesitation in recommending your company to others. In Saunderson House, we have found a team of professionals who are exceptional in their knowledge and advice.”

Key Contact

Ian McNally
Ian began his career in Financial Services in 1986 Read More

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If you would like further information about our services or would like to arrange a complimentary, obligation-free telephone conversation or meeting to discuss your requirements, please contact us.

Passing on Wealth

UK Inheritance Tax (IHT) receipts hit a record £5.4 billion in the 2018/19 tax year, and are expected to carry on growing.

It’s never too soon to get started with Inheritance Tax (IHT) planning. Are you aware of the solutions available that may help mitigate the impact of your IHT bill? Our guide may be able to help.

Read our guide to inheritance tax.