Estate planning
An overview of things to consider when planning
how to pass on your wealth
What you are going to leave behind you at the end of your life
is something that everyone needs to think about seriously at
some point. Whether you want to guarantee that your extensive
collection of Star Wars igurines get the care they deserve,
or you want to make it as easy as possible for your family to
convert your estate into assets that will help them reach their
goals, estate planning is important.
But estate planning is not simply a matter of dividing up your
possessions. It can also be about making sure your current
assets are organised in the right way to help you achieve what
you want to. You may not be aware of the potential utility of the
assets you have been sitting on top of all these years.
In essence, estate planning involves working out what you
have, where you want to go, and how you would like to get
there. To make sure you get the process right, there are certain
steps you are going to need to take.
Working out what you have
One of the easiest ways of inding out what you have - your
net worth - is to use the tried and trusted format of probate.
Although this may sound a little macabre to some, it helps
to identify your assets, debts and tax liabilities, providing a
snapshot that can be used as a starting point for discussion.
Your net worth can be deduced by using the following formula:
assets + gifts – debts = net worth
Your assets
Your assets are anything you own that have value including:
•
money in a bank or building society account
•
property and land
•
personal belongings, such as jewellery
•
furniture
•
cars
•
shares
•
trusts
•
pensions that include a ‘lump sum’ payment on death
•
a payout from a life insurance policy
•
jointly owned property, bank accounts or other assets.
If you don’t own your home but have the right to live there
rent-free under the terms of a will, this is counted as an asset.
Gifts
When thinking about gifts, you need to think about the market
value of any cash or assets you have given away in the last
7 years.
Add your assets and gifts together, plus the value of any payout
from a mortgage protection policy to the value of your estate.
Then deduct your debts and liabilities.
ACTIVE PRACTICE
UPDATES
MAY 2015
Contact us today to talk about your assets.
Personal planning UPDATE
Henwood House Henwood
Ashford TN24 8DH Kent
01233 630000
mg@mageegammon.com www.mageegammon.com