Estate Planning

Estate Planning

Imagine you die, and your entire estate goes to your spouse, from whom you have just separated from. Then your children begin arguing about who gets what and why they should get it. Most of all, do not forget the child you never knew you had: the taxman. All of these people might stand to receive a proportion of your estate if you have not planned and prepared a proper estate plan.

What is Estate Planning and why is it important

Estate planning is a process which has a specific focus on distributing your money, property, and other assets to your family and loved ones in the most tax-efficient way possible. Typical documents associated with Estate Planning include:

Last Will and Testament

If you pass away without making a Will, the Law dictates how your assets will be distributed. These “default” rules are known as the Intestacy Rules and may not reflect your wishes. Not having a valid Will can also lead to family disputes over your assets.

Guardianship Nomination

Estate Planning documents will ensure that your assets are allocated according to your Will and not State inheritance rules. You can also ensure your minor children will be taken care of by the person/s you appoint to do so. A family member or a close friend who you trust, are the most likely candidates and will do the very best job of raising them in case you no longer can.

Power of Attorney:
Health & Wellbeing, Financial, Business

However, estate plans should also include provisions for your own interests later in life. This can be done by appointing a trusted person to take care of your financial, health or business needs if you suffer mental or physical illness in the future and cannot decide for yourself.

Trust for IHT / Succession

An estate plan can also help prevent your assets from being used to fund long term care in the future. This specifically relates to the UK regulations. If you require long term care and have assets in excess of £23,250, you will be expected to pay for it yourself. This could include the forced sale of your home. With the correct advice and use of a Trust, your assets and your family’s inheritance can be protected from this.

Finally, one of the most important aspects of Estate Planning is ensuring that no unnecessary inheritance tax or death duties are paid.

The main reasons why estate plans fail and how to avoid it

One reason for estate plan failures is lack of follow through. You need to implement and then regularly update the plan. Specialists suggest every 5 years, as the tax and inheritance laws are amended, or when any changes in your life happen.

Lack of communication

Another reason why estate planning fails is lack of communication with the heirs. For your estate plan to succeed, your heirs need to know how much inheritance they are going to receive, and how to manage wealth before receiving it. Way too often, children learn of their parents’ wealth and how it will be distributed after the parents pass away. This can create family disputes, and when the wealth is not properly managed – it often disappears.

Lack of information

Not informing the relevant people of the whereabouts of important documents such as the Will, and any financial and medical directives, also called Lasting Power of Attorneys, or simply bank account numbers can cause difficulties when the time comes. If no one knows where these crucial documents are, then execution can become difficult.

Not conisdering a Trust

Perhaps the most common reason why estate plans fail is that certain solutions are overlooked, such as the use of Trusts. The trusts are set up to avoid probate and ensure assets are managed in cases of disability. By not establishing a trust or transferring assets such as property, bank accounts, investments, vehicles, into the structure before you pass away, can delay the passing of assets due to probate court, and can lead to your family having to pay high rates of inheritance taxes which can be as high as 50%.

A tailored, strategic plan for yours and your family’s wealth

Soteria Trusts, a brand of Platinum Financial Services, specialises in bespoke wealth planning solutions to help clients with their most complex multi-generational needs, with the emphasis on Estate and Inheritance Tax Planning.

How we can help

It requires more than money to build lasting wealth for generations to benefit from. Careful bespoke planning and execution of your plan can ensure that your estate will be passed on to your family swiftly and as efficiently as possible.

Protect Your Savings

In case of a sudden illness or accident, you don’t have to utilise your savings to pay the high price for medical treatment. Surgery and room costs in Hong Kong’s private hospitals can easily reach US$100,000 for major heart disease and cancer. This can be covered by the insurance plan, should you have coverage in place. Your savings should be used for their intended use, such as buying a home, funding your children’s education and retirement.

The cost of quality healthcare is at a premium. We have close partnerships with market-leading international healthcare insurance companies that offer sustainable products making sure that we can match the required level of cover to your budget.

We don’t charge you for our services, so premiums are the same as going directly to the insurance company. What you get is advice on the plan’s benefits and coverage limits that make sense to you and your financial situation.

Don’t leave your financial future to chance.

Contact Platinum Financial Services to help you through your financial journey.