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A couple of months ago we talked about Inheritance Tax and how to reduce your tax bill by planning ahead. Much of that often focuses on leaving an inheritance to children and grandchildren. But what if you don’t have children? According to the latest figures from the Office of National Statistics, almost 20% of women of child-bearing age don’t have children. We explore why estate planning is still important if you don’t have children and what the options are for your inheritance plans. For specific advice tailored to your circumstances, talk to our independent financial advisers at www.plutuswealth.com.
It is a mistake to assume that having no children means you shouldn’t plan ahead. Estate planning is putting a plan in place that will distribute your assets in a way of your choosing when you die. The best way of doing this is by drafting a will.
Your estate is made up of your assets. These typically include:
If you do not have a will, you will be classed as dying intestate when you pass. This means that you have not decided who you want to leave your assets to. When this happens, the government decides the fate of your estate. There are rules in place for this. For example, if you have a spouse, they will automatically be entitled to your estate. If you are single, or living with a partner, your parents will be next in line to inherit your estate.
Beware: if you live with a partner but are not married, regardless of how long for, they will not inherit anything. They may even end up having to sell some of their assets to ensure your family gets the full value of the inheritance. In turn, they may also end up with a hefty Inheritance Tax bill. Regardless of your family situation, estate planning and drawing up a will are important life milestones.
You have plenty of options of what to do with your assets even without direct descendants. The critical steps are to identify what those are.
Whatever you choose to do, consider the Inheritance Tax implications. At present the UK Inheritance Tax rate is set at 40%. However, there are a number of ways to reduce this. Our previous article sets out a few ways you can do this. For targeted advice with your specific circumstances in mind, it’s best to talk to one of our Plutus Wealth independent financial advisers. Get in touch to set up an initial call by emailing us at firstname.lastname@example.org or by ringing us on 020 7871 5200. We’re here when you’re ready.