Introduction
Charting the course ahead
Your beliefs and values should dictate how your wealth is passed on. Estate planning is an emotive subject that involves deep thinking and debate on some challenging issues.
Thoughtful estate planning advice allows you to provide for loved ones, support meaningful causes and uphold the principles that are important to you. By aligning your plans with your values, you create a lasting impact that extends beyond financial considerations.
How we help
About Estate Planning
What is Estate Planning?
Estate planning is the process of arranging and organising your assets and affairs so they can be easily managed and distributed according to your wishes on your death.
The process involves making decisions such as who on death will inherit your property, who will care for your children and how your finances will be handled should you become incapacitated. Estate planning is important for everyone, regardless of age or wealth. It can help you protect your loved ones and potentially help minimise any tax* liability on your death.
Why does Estate Planning matter?
We think that the following three questions are a great place to start when it comes to making decisions about your estate planning. Think about them in terms of when you die, but also the opportunities that exist during your life.
- Who do I want this to benefit?
- What impact do I want to have on them?
- When do I want this to happen?
Being clear about what you want to achieve now will make navigating the complexities easier. Having clear, well documented and organised plans in place can help make life easier for your loved ones at a time when they are grieving.
We will help you consider the estate planning opportunities that might be available to minimise the impact of tax as you pursue this.
The best plans are those that are unique to you. They consider your wishes for the distribution of your estate to your chosen beneficiaries.
Knowing when to pass on wealth and who to pass it on to can be difficult in itself, without the added complexities of inheritance tax*. Our experienced Estate Planning team of chartered financial planners, chartered accountants and chartered tax advisers create an open and honest environment to discuss your thoughts, wishes and concerns and can guide you through this complex and deeply personal process with care and expertise.
This joined-up service provided by our Financial Planning and Tax experts not only saves you time, but it enables you to make objective financial decisions about the future of your wealth and minimise exposure to unnecessary tax.
We’ll also ensure you use your wealth wisely to benefit the next generation, while also balancing it with unforeseen personal costs, like residential nursing fees. Effective planning can help manage potential inheritance tax liabilities, offering reassurance that your wishes are more likely to be fulfilled.
Who is Estate Planning for?
Estate planning is for everybody – but can be especially important for families and blended families. Families have unique needs and challenges that must be considered when making estate planning decisions. For example, families with young children may need to appoint guardians to care for their children if they die. Blended families, which include children from previous relationships, may need to take extra steps to ensure that all their children are treated fairly in their estate planning.
*Tax and Estate planning are not regulated by the Financial Conduct Authority.
We can help with:
- Inheritance Tax Planning
Inheritance tax planning can be complex and involves some difficult and emotional decisions. We’ll ensure you use your wealth wisely to benefit the next generation, while also balancing it with unforeseen personal costs, like residential nursing fees. Effective planning can help manage potential inheritance tax liabilities, offering reassurance that your wishes are more likely to be fulfilled.
- Estate Planning
Estate planning is a comprehensive process of structuring and arranging your assets and financial affairs to ensure they are managed and distributed according to your wishes after your death or if you become incapacitated.
- Business Estate Planning
Business estate planning is a key process for business owners to ensure the smooth transition and continued success of their company in the event of their incapacity or death. It is a specialised form of estate planning that addresses the unique challenges and considerations related to business ownership. We can work with you and help you with both your personal and business estate planning and how these areas interrelate.
- Business Succession Planning
We have a particular expertise in business succession planning as it related to us becoming employee owned. We can work with you to create a plan that outlines how the transition of leadership and ownership will take place. The plan will include timelines, responsibilities and communication strategies to ensure a seamless handover. We have first hand experience of how this process should play out.
Still have questions or want to know more?
Ready to talk about the future?
Estate planning can be complex and involves some difficult and emotional decisions.
Values
Why choose Paradigm Norton?
We always put you, your values, and your future at the heart of every conversation. Our approach ensures that every strategy we craft is deeply aligned with what matters most to you, securing not just your wealth, but your well-being.
The best plans are those that are unique to you. They consider your wishes for the distribution of your estate to your chosen beneficiaries. We’re here to guide and navigate you through a path of your own choosing.
Our in-house tax and estates team create an open and honest environment to discuss your thoughts, wishes and concerns and can guide you through this complex and deeply personal process with care and expertise.
We are committed to impacting lives for the better, driven by principles that prioritise people, purposeful actions and building a sustainable future.
As a Certified B Corporation®, we balance profit with purpose, people and the environment.
Real stories
The availability of choices
Having choices is one of the outcomes of successful financial planning. Here Tina shares her love for creative cooking, her views on money management and how we’ve helped her to achieve a freedom that has enabled her to live her life to the full.
Team
Our Estate Planning Team
Our in-house tax and estates team can support you and help give you clarity.
Read
Brochure
Free financial planning resources
Helpful tools and guides to start planning your financial future with confidence.
Questions
Estate Planning FAQs
Let us help you answer your Estate Planning questions.
How should I pass money to family members?
Giving away money to family can be done at any time and in any amount, but it is important to be aware of the various exemptions that allow you to gift without the need to consider inheritance tax (IHT).
You can gift £3,000 each tax year, which is known as the annual exemption, with no IHT implications. This exemption can be carried forward to the next year if it is not used.
There are also exemptions for small gifts (up to £250 a year) and for wedding gifts (ranging from £1,000 to £5,000 depending on the recipient).
Additionally, you can make regular gifts out of your excess income, provided these gifts do not affect your standard of living. It’s important to keep detailed records of these gifts to prove they were made regularly and from surplus income. Such gifts are also exempt from IHT.
Any gifts outside of these exemptions could potentially be subject to IHT if you do not survive for seven years after making the gift.
If you wish to retain control after gifting money (for example when gifting to minors), you may want to consider setting up a trust and making the cash gift to the trust. Depending on the amount you settle on trust, there may be an immediate IHT charge and there are also periodic and exit charges to consider later down the line.
Gifting of assets, such as property, may trigger a capital gains tax liability (alongside a potential IHT liability) and therefore, it is advisable to seek professional advice to manage these tax implications effectively.
Regardless of how you make the gift, always consider your financial position to ensure that the gift does not impact your financial well-being.
What is the best way to donate money to charity?
Cash gifts to charity are straightforward and can be enhanced through Gift Aid, which allows charities to claim an additional 25% on top of your donation if you’re a UK taxpayer. Additionally, if you are a higher rate taxpayer you can claim back the difference between the tax you’ve paid on the donation and what the charity got back.
Your donations will qualify for Gift Aid as long as they’re not more than four times what you have paid in tax in a tax year (6 April to 5 April).
You can also donate other assets like shares, land, or buildings to charity. Gifting assets this way can be very tax-effective as you receive both Income Tax and Capital Gains Tax relief.
Ultimately, the best way to donate money to charity depends on your financial situation, available assets, and your personal goals for the donation. Consulting with a financial adviser can help you make the most of your charitable contributions and ensure they are aligned with your overall financial plan.
It’s also worth considering whether you have any spare time that you could donate instead, as many charities value volunteers as much as monetary donations.
How do I set up a trust fund?
The first step in establishing a trust is to clearly decide on its purpose and what you want it to achieve such as asset protection, a tool for estate planning, or providing for beneficiaries in a controlled manner. Trusts can be set up during your lifetime or written into your will.
The type of trust to use will depend on the purpose of the trust and who it is to benefit. Legal advice should be sought to ensure that the correct type is chosen. A solicitor can also help you draw up the trust deed to outline the trust’s terms, including its purpose, assets, beneficiaries, and distribution rules.
As part of the process, you will need to choose trustees to manage the trust. This can be an individual, a group, or a professional trustee like a solicitor or trust company but should be someone you trust and can rely on.
Once the trust deed has been executed, assets such as cash, property, or investments, can be transferred into the trust. Depending on what is being transferred, tax advice should be sought to ensure that any tax liabilities are correctly calculated and reported to HMRC. The trust may also need to be registered with HMRC and there may be annual tax reporting required, depending on the type of trust and the assets it owns.
Inheritance tax may also need to be paid at various points in the trust’s lifecycle – e.g. when assets are transferred out of the trust or the trust reaches the 10-year anniversary of when it was set up.
Professional advice should always be sought before setting up a trust.
When and how can I gift money?
You can gift money at any time and lifetime giving can feel more beneficial and impactful than inheritances received on death.
There are various ways to make gifts, such as direct cash gifts, bank transfers, gift cards, trusts, funding Junior ISAs for those under 18, and pension contributions. The annual exemption allows you to gift up to £3,000 each tax year and this can be carried forward to the next year if it is not used. Additionally, you can make regular gifts out of your excess income, provided these gifts don’t affect your standard of living and should be part of your normal expenditure.
Life events, such as weddings, offer special gifting exemptions. For instance, you can gift up to £5,000 to a child who is getting married without any inheritance tax implications. Other specific exemptions include gifts to charities and political parties. For younger recipients, investing during their childhood into a Junior ISA which they become entitled to at 18, which provides tax-efficient savings maybe be preferable. Additionally, small gifts of up to £250 per person can be given to any number of individuals each tax year without any inheritance tax implications. This is separate from the annual exemption and can be particularly useful for occasions like birthdays and holidays.
How much money should we leave to our children?
When considering how much money to leave your children, it’s crucial to assess your own financial needs. Ensure you have enough for your own future first to maintain your standard of living and cover any potential healthcare costs.
If your children are already financially stable, you might focus on ways to support their personal growth. This could involve funding their education, helping them start a business, or contributing to a cause they are passionate about.
Additionally, planning for the next generation, such as setting up trusts for grandchildren’s education, can ensure your legacy continues to provide support and opportunities.
The number of children you have also plays a significant role in your decision in terms of how much to give. You may need to consider whether you wish to distribute your estate equally or unequally based on individual circumstances and needs. Transparent and sensitive discussions with your children about your decisions can help them better understand your wishes and prevent any future family conflict.
How do I establish a charity?
The first step in establishing a charity is to define the purpose – i.e. what you want to set it up to achieve. The purpose needs to be one that will help the public and that falls within those listed in the Charities Act. Clearly articulating the purpose will help potential trustees, supporters, and beneficiaries to better understand what the charity does, who it helps, where and how it works.
The structure of the charity will affect things like who runs the charity, how the charity is run and what the charity can do. Therefore, it is important to select the structure that best aligns with your goals and resources. A solicitor will be able to guide you as to which structure is best and help draft the governing document for your charity.
You will also need to choose trustees to manage the charity. You should make sure that the individuals you choose have the appropriate skills to match the charity’s needs. Your governing document may state the minimum or maximum number of trustees. The Charity Commission website has lots of useful information on selecting trustees, and what their role is.
Once you’ve set up your charity, you will need to register with the Charity Commission. Your solicitor should be able to help you with this as part of the set-up process. You will also have annual reporting requirements including an annual return, trustees’ annual report and annual accounts.
Charities are powerful giving vehicles but can be costly and time-consuming to maintain. An alternative to setting up your own charity is to use a donor advised fund (DAF) through a provider such as CAF or your local Community Foundation. With this option you will have less flexibility over the underlying assets in which your donations are invested but a reduced administrative burden.
