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Why is Estate Planning important?

Estate and inheritance tax planning for a US person living in the UK is an important area of your financial life to address. This is probably even more so due to the large differential in the nil rate inheritance tax bands available in the UK as compared to the US (£325,000 versus a current $5.45 million in 2016). A lack of understanding about how inheritance tax works can end up costing families hundreds of thousands if not millions of dollars. However, proper planning can help minimise the amount of inheritance tax payable and help ensure that families are left with an estate that will provide for their needs after death. Proper strategies will largely depend on the individual circumstances of the decedent.

Considerations need to be given to the following:

• Whether you are deemed to be UK domicile or non-UK domicile
• Location and situs of assets
• What would be ideal versus acceptable
• Size and composition of assets
• Citizenship of spouse, if applicable
• Citizenship and relationship of estate beneficiaries
• Whether any lifetime wealth transfer is feasible

There is significant personal thought and planning that goes into what strategies will best meet your specific individual preferences. Sometimes it’s difficult to know where to start or how to think about the eventual distribution of your assets. It is often beneficial to have a solid idea ahead of sitting down with a solicitor so that you can have more productive conversations. Taking the time to frame your thinking on who you might want to pass assets to will begin the process of developing a strategy based around your own needs and requirements.

Estate Planning is a dynamic process. As your life develops your beneficiaries and charities will change. This should not be an excuse to not plan but instead to amend and tweak existing structures.

For more wealth planning tips and tidbits from MASECO read our 39 Steps to Smart Living in the UK.

Risk Warnings and Important Information
The value of investments can fall as well as rise. You may not get back what you invest.
The above article does not take into account the specific goals or requirements of individual users. You should carefully consider the suitability of any strategies along with your financial situation prior to making any decisions on an appropriate strategy.

MASECO LLP trading as MASECO Private Wealth is authorised and regulated by the Financial Conduct Authority, the Financial Conduct Authority does not regulate tax advice. MASECO Private Wealth is not a tax specialist. We strongly recommend that every client seeks their own tax advice prior to acting on any of the strategies described in this document.


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