Your personalised estate planning needs will depend on many factors including age, health and family commitments. It will also be affected by the types of assets you own. Planning with business assets is likely to be significantly different to that undertaken for investments. Similarly, planning undertaken with investment assets is likely to vary depending on what the investments are. For example, planning with a property portfolio will be different to planning with a stocks and shares portfolio. Over time, the assets you own are likely to change and therefore, if you are undertaking personalised estate planning, your plan may need to be adapted periodically.
Undertaking lifetime planning is daunting. No one likes to consider when they might die or events which they might want to protect against such as divorce, bankruptcy or creditor claims. It’s no wonder why many avoid lifetime planning and simply write a will. However, if you begin considering personalised estate planning early enough, the journey can be gradual.
Many clients will ask: “When should I start estate planning?” The answer depends on each client’s circumstances although a simple guide would be when the cost of life insurance to cover the inheritance tax liability exceeds the cost of advice and implementing structuring. Even when life insurance is in place, a modest amount of planning may be suitable. For example, establishing a trust or foundation to receive the benefit of the policy and putting a will in place would seem sensible.
It is also important to know what you can do to plan in advance of an event. Imagine you have successfully built up a trading business which is then sold. You now have cash to undertake estate planning whereas before you may have held shares that qualified for inheritance tax relief. If planning had been undertaken with the shares, it would have been possible to place funds in a protective trust (or similar) without a charge to inheritance tax . Another illustration is where an asset is expected to grow considerably in value (i.e. intellectual property or shares in a successful start-up) it might be better to plan before they increase in value.
Personalised estate planning requires, in our view, an approach that takes into consideration your current situation, future goals and aspirations. It requires a willingness to explore different possibilities and often to nurture a client’s knowledge long in advance of putting a plan in place.