Value based estate planning — can take two distinct forms depending on the circumstances.
Some people want the values they live by – or sometimes the values they wish they had lived by – to be continued after they have gone.
This can mean the setting up of charitable foundations at one extreme, to taking advantage of the Inheritance Tax break available when one-tenth of the estate goes to registered charities. (Be careful with that one – it isn’t as straightforward as it might seem.) Alternatively, it can mean setting up trusts or inheritance conditions designed to ensure the persons’ values are adhered to by those who wish to inherit.
At other times, estate planning involves protecting people from themselves or from exploitation – perhaps they are easily led, involved in drugs or gambling, or they have a spouse or partner who is a spendthrift or might divorce the beneficiary to get a share of the inheritance. Others are scared the money won’t stay in the family if their child or grandchild dies, and their partner remarries. It is often called sideways disinheritance.
We rather like the type of value-based planning – writing letters expressing those values, or better yet, passing them on in life. No gift in a Will can match the gift of time while you are still alive, but sometimes leaving messages behind is the only way for one reason or another.
Family Trusts have long been used by the wealth to keep their assets in the family sometimes for hundreds of years and this healthy habit is spreading to Middle England where most people can afford to create a Family Bank for future generations. As long as they start early enough, the benefits for future generations can be staggering. In two generations, the family wealth could be doubled, to the benefit of children and to an even greater extent, grandchildren. Wouldn’t it be nice to be sure that future generations could go to University and have help buying a home? And there is no harm in having charitable objectives too.
With second, third and even fourth marriages becoming common, careful planning can be fair to all, where conventional estate planning almost always creates winners and total losers. The losers are often the wrong people, as are the winners. Regular review is something we offer, and without it your estate planning is likely to be at the very best a partial failure.
Lack of estate planning is worse, and will often have dire consequences for loved ones whose partners fondly assume they are immortal and that the Rules of Intestacy are fair.
Either way, if your estate planning isn’t top notch, perhaps you should be speaking to us?