Most of us dream of making the lives of our loved ones better. That is why a lot of people strive to accumulate wealth, properties, vehicles or something valuable that they can leave as inheritance for their loved ones. Nobody wants to see everything that they have accumulated during their lifetime to go to waste when they die. Most of us want to pass down what we have worked hard for from generation to generation, not just to leave a legacy, but to make sure that our loved ones will have a better life. But, life is full of surprises and nobody can predict when they will die. It can happen in a split second and if you’re not prepared, your loved ones may not inherit what you have intended for them. Hence, it is of utmost importance to create Wills and Trusts, which are very important estate planning tools that we fail to consider. Some people don’t even think about estate planning, because they feel that they don’t even have any assets to leave for their loved ones. But if you own a car, a home, a business or anything of value, then you do have an estate.
Many people interchange wills and trusts, because they are both estate planning options that are alike, but serve different purposes.
A WILL is a legal document that allows you, the testator, to give the legal right to one or more persons (executor/s) to manage your estate until its final distribution and to put into detail your final wishes as to how your property should be distributed after death. It allows you to appoint guardians for your children. It also allows you to appoint who inherits (beneficiaries) your properties, investments and finances when you die.
TRUST on the other hand is a legal arrangement where a person or group of people are given legal right and responsibility to own assets for the benefit of another person or group of people. It is used to control and protect family assets. It is used when someone cannot handle their affairs, because they are incapacitated or too young to handle their affairs. You can also use it to pass on assets while you’re still alive or when you die.
Have you ever wondered what will happen if you do not have a Will and Trust when you die?
If you die without a will or your will is invalid, your estate will be distributed based on the rules of intestacy, which means that your estate will not be divided / distributed the way you wanted it to be. Hence, your estate may go to somebody whom you did not wish to benefit and the ones you wish to inherit it may not receive anything. In addition, if you do not have any surviving blood family or relatives, everything you’ve worked hard for will go to the government. Another consequence of not making a will and trust is that your family will end up paying the high rate of inheritance tax. Current inheritance tax laws state that any part of your estate which is over the value of £325,000 has to be taxed at 40%. Consequently, if you have a house and a life insurance policy, the total value of your estate can quickly exceed this limit. By writing your policy in trust, you could potentially avoid your estate being valued at more than this amount. If you don’t make a will and trust, your loved ones will have to wait for probate to be granted, which can take months or even years.
It is never too early to make Wills and Trusts. Spare your loved ones from sorting through the legal mess and protect your assets and your properties. Click on Get A Free Quote or call 02380 170 850 to know more about Wills and Trusts.