Estate planning is all about making sure your assets (eg. money, property, other possessions of value) are looked after and distributed the way you want after your death.

The planning process typically involves writing a will, planning for any potential inheritance tax liability, life insurance, and the setting up of trusts. In fact, everything you need to make sure your estate goes precisely where you intend it to go, without incurring unnecessary tax.

Here at Amber River, we believe in getting all the relevant parties involved early on – your spouse, children, and anyone else you intend to benefit from your estate. Starting these conversations early means that their interests and perspectives are taken into account. That should lead to a smoother process, one that your beneficiaries understand and accept.

High-net-worth individuals often have complex financial arrangements. You may receive your income from multiple sources, own a business and several properties, hold international assets, and be involved in philanthropic ventures. If this is the case, you’ll need a unique estate planning approach encompassing every aspect of your life.

For people with large estates, taxes can take a big bite out of what's left for your family.

Why estate planning matters for wealthy families

While you’ll no doubt want to make sensible decisions with your new-found wealth, it’s best not to rush into anything. Give yourself some time. Wait until you’re in a good place and able to think clearly before making any major decisions.

An easy-access savings account is an obvious first step, although bear in mind that the interest rates currently available might go down and inflation could erode the value of your cash over time.

It’s a relatively safe, albeit temporary home for your money though, as the Financial Services Compensation Scheme (FSCS), will protect up to £85,000 (or £170,000 for joint accounts). The FSCS also offers temporary protection for anything up to £1 million. This gives you six months’ breathing space while you consider the longer-term options.

Should you seek financial advice?

It’s not just about who gets what; it’s about preserving your wealth, reducing your estate taxes, making sure your money goes exactly where you want, planning for the future of your business (if appropriate), and leaving a legacy that lasts.

– Keeping your wealth in the family
A good estate plan protects your assets from legal claims, creditors, or complications due to a divorce or a complex family structure. Trusts can be a great way to make sure control of your wealth stays within the family and is distributed and used according to your instructions.

– Reducing taxes on your estate
For those with larger estates, taxes can take a big bite out of what’s left for your family. But with the proper planning, like using trusts, making gifts, and setting up life insurance, you can keep more of your wealth where it belongs – with your loved ones.

– Planning for your business’s future
If you own a business, which forms part of your estate, planning ahead will maintain continuity and stability, even when it’s time for someone else to take the reins. A well-structured succession plan not only avoids the risk of potential conflict between family members, but also optimises tax efficiency during the transfer.

– Leaving a Legacy
Estate planning means you can make sure the things that matter to you continue. Be it a family business, a charitable trust, or the ancestral home – an estate plan will ensure they are safeguarded for future generations long after you’ve gone.

Financial Freedom

Your financial planner isn't just there to give advice; they're a crucial part of ensuring your estate plan does exactly what you need.

1. Setting clear objectives
The first step is to consider the goals and aspirations you have for your wealth after your death:
– How do you want your estate distributed?
– Who do you want to benefit?
– What’s your family’s involvement in your businesses or other investments?
– Have you established any philanthropic ventures you want to continue after your death?
These objectives form the foundation of your estate plan and why it’s so important to be clear about precisely what you want to achieve.

2. Working with your wider professional team of advisers
Your financial planner will work together with a team of professionals, including your solicitor, accountant, and potentially a family business consultant. Their collective expertise ensures your estate plan is tailored to your specific goals and adheres to all legal and tax requirements.

3. Conducting regular reviews
Estate planning is an ongoing process, requiring updates in response to changes in your life, assets, and the regulatory landscape. Life events (a new family member, for instance), a downturn in the economy, or shifts in tax allowances can trigger the need to make adjustments to your estate plan to ensure it remains relevant and effective.

4. Communicating with your wider family
A sensitive, open dialogue with your family is crucial to avoid future misunderstandings and disputes. Ensuring your heirs understand the nature of your estate plan, their roles and responsibilities within it, and the professional team you’ve put in place to advise you and them is critical. A financial planner can often become pivotal in difficult conversations – organising family meetings in a structured environment for these vital discussions.

Getting the right advice on estate planning means you can rest easy, knowing your wealth will be looked after just the way you want. And that’s precisely what we’re here for at Amber River – to help you make a plan to secure your legacy for generations to come.

Get in touch

Amber River has a network of Chartered financial planners right across the UK, ready to offer truly independent advice. If you want to set up an initial appointment, call 0800 915 0000, or alternatively use our contact form here.