Estate planning has to do with the planning of property as well as future generations in such a way as to ensure that both the property and its expectations are correctly met. As it is in any part of the world, a private bank in the UK is doing the same by using private bankers to advocate and navigate clients through the process of estate management.
What Is Estate Planning?
What is included in estate planning? It is simply putting into consideration all of the steps that have to be taken so that the assets that you own and intend to pass onto your heirs will be done in a way that is both tax-friendly and legal. The process entails a number of legal activities such as appointment of executors through wills, establishment of a trust and inheritance tax (IHT) planning. It also ensures that the deceased wishes are met, ensuring that the client’s intentions are honoured in those conditions.
The Role of Private Bankers in Estate Planning
When seeking the services of private bankers, it is imperative to help them understand your finances, objectives in the long term and family matters. When involved in the estate planning process, these professionals are able to help with:
Asset Review and Analysis
Private bankers develop estate plans by analysing the client’s funds, investments and any business a client may possess.
Inheritance Tax Planning
Private bankers are skilled professionals who use tools to decrease the amount of inheritance tax required to be paid, therefore, more wealth is distributed to the heirs.
Trust and Will Creation
In the creation of private trusts, as well as clients’ wills, these experts help clients ensure that these procedures are executed legally and in a tax-effective manner.
Family Wealth Management
Private bankers offer advice on the movement of wealth across generations and assist clients in creating mechanisms to ensure that their relatives, especially descendants, will not be left in financial distress.
How Private Bankers Help With Complicated Family Structures
For clients with multifaceted family structures, like those with subsequent marriages, children from different marriages, or several dependents, private bankers can ensure a balanced division of assets through an estate plan. They can arrange for family trusts, mediate family meetings, and resolve disputes so as to maximise the overall family finances.
Minimising Property or Inheritance Tax Liability
Inheritance tax (IHT) is one of the vexatious issues affecting those living in the UK. The societal system has the charge of inheritance tax at 40% on estates beyond a certain limit which in aspect lessens the majority of wealth that is inherited by beneficiaries. Private bankers offer a range of strategies to help limit clients IHT exposure, for instance:
Seeking the Services of Tax-Efficient Trusts
To eliminate the burden of taxes while preserving their wealth, private bankers set up tax-efficient trusts like discretionary and life interest trusts. These trusts make certain rules that allow assets to be distributed to beneficiaries or heirs while ensuring they do not have tax liabilities.
Gifting Inheritance
Some private banks provide their customers with advice on how to gift during their lifetime to make sure they receive maximum estate tax exemptions. By giving out properties during their lifetime, the asset value of the estate is reduced, which brings down the value of tax that needs to be paid on the inheritance by the beneficiaries.
Tax Relief
Private bankers also assist clients in availing relief on Inheritance Tax (IHT) through Business Relief and Agricultural Relief. Clients can protect their family’s wealth while utilising HMRC’s tax incentive schemes by placing assets into appropriate investments or qualifying industries.