This is a collaborative post
Securing your children’s future might feel like a daunting task, but with a little forward planning, it doesn’t have to be. From making sure your assets are passed on smoothly to deciding who will look after your children if the unexpected happens, there are some key steps every parent in the UK should take.
With recent changes to inheritance tax rules shaking things up, now is the perfect time to get on top of your family’s plans. We’ll walk you through everything you need to know so you can feel confident that your children’s future is safe and secure.
Estate Planning
This involves organising your assets and determining how they will be distributed upon your death. It includes drafting a will, setting up trusts and considering tax implications.
The recent budget has extended the inheritance tax threshold freeze until 2030, meaning it will remain at £325,000. This means that, with rising asset values, more estates could become liable for IHT, so effective estate planning is more crucial than ever.
From April 2027, inherited pension pots will also be subject to IHT. Previously, pensions were often exempt, but this change means they will now count towards the value of your estate.
Appointing guardians for minors
Designating a guardian for your children ensures their care if both parents pass away. This appointment is typically made through your will.
It’s essential to choose someone who shares your values and is willing to take on the responsibility. You should make sure to discuss your decision with your chosen guardian to ensure they are prepared for the role.
You might also want to consider writing a letter of wishes. This isn’t a legally binding document, but it can give guidance to guardians. For example, you can use it to outline your preferences for how your children should be raised, including schooling or religious upbringing.
Understanding trusts
These are legal arrangements that allow you to manage and protect assets for your beneficiaries. They offer control over how and when your children receive their inheritance, which can be useful in complex family situations or when minors are not yet mature enough to manage significant assets.
Trusts can also provide tax advantages and protect assets from creditors or divorce claims. But they come with legal responsibilities and potential tax implications, so professional advice is recommended.
Seeking professional advice
Estate planning can be complex so it’s advisable to consult a will writing solicitor for advice on the legalities. Professionals can provide personalised guidance tailored to your family’s circumstances, optimising the benefits for your children while staying compliant with the law.
A reputable solicitor can help you navigate the intricacies of wills, trusts, tax planning and guardianship arrangements, providing peace of mind that your children’s future is secure.
Disclosure: This is a collaborative post