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Wealth Preservation

07/01/2009

PRESERVATION of wealth is as important as wealth management in these credit-crunch times. Lancashire Business View

Planning and investment are the cornerstones of good husbandry and that means looking at ways to ensure the future of your wealth even after your death. Susan Hartley from Bolton solicitors KBL, states: “If you are married or in a civil partnership, everything that passes to your spouse or civil partner is tax-free. However, anything passing to anyone else is subject to Inheritance Tax.”

Each person can gift up to the Nil-Rate Band of £312,000 on their death tax-free. If unused on the first spouse’s death it can be transferred to the second spouse’s estate on their subsequent death – although careful record keeping is needed. “In your lifetime, £3,000 each tax year can be gifted to anyone you choose without it being liable for tax,” adds Susan.

You can also give away regular gifts from your income providing it doesn’t affect your quality of life, or decrease capital i.e. if you have a large monthly income and don’t use all of it, you could pay school fees for grandchildren using your excess income and it would be tax-free.”

Discretionary Trusts can preserve assets against divorce or nursing home fees, and a sensible move is to have a Lasting Power of Attorney (LPA) in place. This means assets can be moved about by family if you are incapacitated and unable to take decisions. “Current delays by the Public Guardianship Office in dealing with documentation could result in losses to people’s wealth because the LPA has not been registered.”

Make a will – “without one intestacy rules come into force which may not reflect your wishes”. It also allows you to still “spend” your wealth as you wish, and can reduce administration costs and even Inheritance Tax through the use of Trusts.

Assets held in joint names - like the family home, bank/building society accounts and other investments - will pass to the surviving spouse “but assets held individually will pass under intestacy,” warns Susan.

For further information please visit Wills, Trusts & Probate or contact Susan Hartley on 01204 527777.

ENDS For more information, please contact Gill Hart or Kirsty Carss at KBL on 01204 527777