Moreover, the use of a trust and/or a QNUPS can also eliminate the need for probate of your estate after death. The typical route to tax mitigation, which is used by families with larger estates, is the creation of a family Trust, or for those who are tax savvy and financially astute, the transfer of assets to QNUPS. Planning around your inheritance tax position in advance will help you legally minimize this liability. However, since this tax is due after you pass away, your children will have to face it. Inheritance Tax is charged on the value of your estate at a rate of 40% over the £325,000 threshold as of today (2022). You should stay up to date with the UK’s Inheritance Tax Rules & Thresholds and be aware of the taxes your loved ones may have to pay in order to access the family home or other assets you worked for your entire life so that you could all benefit. Capacity, whether physical or mental, can be lost every day through accidents or serious health conditions age can also be a factor, especially since more people are now experiencing dementia symptoms during their forties. It’s important to note that in order to set up an LPA (Lasting Powers of Attorney), one must be mentally fit. While a Will is an essential legal document that ensures your wishes relating to your estate are distributed in the way you want them to be after you die, a Lasting Power of Attorney (LPA) is a crucial document for when you are still alive. If you are considered to have lost mental capacity, financial institutions, such as your bank, can freeze all your bank accounts, even if they’re joint accounts, and prevent any access to funds. ![]() This is to avoid situations in which local authorities are given the right to access and manage your bank account and make decisions about your healthcare and even your business, should you be deemed incapacitated or not fit to do so yourself. ![]()
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