Is your Inheritance a Taboo Subject?

September, 2012 TSG_PTIMG_620x920_family

Money matters are one of the most difficult topics of conversation to bring up – even with your nearest and dearest. But, as you get older, it could prove beneficial to be open with your children and grandchildren regarding their inheritance.

74pc of adults have never discussed inheritance with their parents according to July 2012 research by Investec. When asked why, 48pc were concerned they would appear money-grabbing and 46pc don’t want to think about their parents passing away. A third of those surveyed had no idea what they stood to inherit.

Although you might have clear ideas regarding who will inherit what, without making adequate arrangements you could inadvertently leave behind emotional and financial issues for your loved ones. Family disputes over the deceased’s possessions are not uncommon, and many estates could also be subject to 40pc inheritance tax on everything above the threshold (see below).

By taking a proactive and inclusive approach to your inheritance planning, you can ensure that, when the time comes, everyone inherits what you want them to have – and in the meantime everyone knows where they stand.

What about tax?
As a first step, you should consider the implications of inheritance tax. If the value of your possessions is above £325,000 (if you’re single or divorced) or £650,000 (if you’re married or widowed), your loved ones could have to pay a 40pc tax bill on everything you own above the threshold. Furthermore, they might be forced to pay it before they can inherit what you want them to have.

There are ways of reducing or, in some cases, eliminating this potential liability, providing you make adequate plans.

Do you have an up-to-date Will?
A will is an obvious – but significantly overlooked – way of determining who inherits what. In April 2012, Saga reported two out of five 55-64-year-olds, and a quarter of over 65s, haven’t arranged a will. If you die without one, the government, rather than your loved ones, is likely to dictate how your estate is distributed.

An out-of-date will could prove equally problematic. Consider the implications of failing to include an additional child or grandchild as a beneficiary.

Get no-obligation advice today
The Telegraph Inheritance Tax Service, provided by Skipton Financial Services (SFS), offers no-obligation advice on estate planning. SFS can determine if you may currently, or in future, have an inheritance tax liability, providing guidance on ways you could reduce or, in some cases, eliminate this potential bill.

SFS can arrange a valid will on your behalf, setting out how your assets should be distributed upon your death. They can also assist you in considering your wider financial and investment needs, so nothing is overlooked.

By obtaining suitable advice now, you’ll have peace of mind that your finances are suitably organised for whatever the future holds – and can then instigate those awkward conversations with your family, so they have peace of mind too.

Any investments recommended as part of the inheritance tax planning solution may put your original capital at risk and the returns and the level of any income taken from them is not guaranteed and can fall as well as rise. The tax treatment of investments depends on your individual circumstances and may be subject to change in the future.

For more information about how the Telegraph Inheritance Tax Service – provided by Skipton Financial Services – can help, call 0800 389 8395 quoting ‘TM77

Sourced form The Telegraph

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