There are a couple of final points to consider when it comes to legacy planning.
Keep it Simple and Keep Good Records
I’m going to repeat my mantra of keeping it simple. Just because you can use trusts to make things happen doesn’t mean you should. In all your estate planning, err towards simplicity. If you’re thinking about leaving a property in trust for your kids, ask yourself why you wouldn’t just give it to them now.
Not the house you live in, because that generally doesn’t work. But if you’ve got a rental property or you’ve inherited a building you’re not using, you might just say, “Well, I’ll give it to them now.” Or sell it and give them the money – maybe they’d find that more useful.
Rather than setting up a fancy mechanism to provide help for your grandkids at university, why not just set up a regular gift to them by standing order from your bank account to theirs? Simple is ALWAYS best. It’s best because it is cheaper – you don’t need to pay a lawyer to write a trust, and less likely to come with punitive tax implications.
Whatever you do decide to do, keep good records. This is especially true for gifts. Keep a simple log of any gifts you make, whether to individuals or to charities. All you need to show is the date, how much and who to.
This will be invaluable when your executors come to summit their returns to the Revenue. There will be no trawling through bank accounts. Keep the log with your will and keep it up to date.
If you do set up trusts or other mechanisms, make sure the documents are kept centrally somewhere they can be got at easily. Make sure there are copies (proper certified copies by a solicitor, not just photocopies) held offsite in case the house burns down or something. Keeping good records is always a good plan, and yet it’s something that so many of us don’t do well enough.
Don’t DIY
And finally, while I spend lots of time telling you that you can do almost everything to do with your personal finances yourself, without professional help, this is one area where you really will benefit from paying some money to a competent solicitor.
They will help you think through your options, starting from the point of your wishes, remember, and then will draft the relevant structures – wills and trusts – to get it done. They will also carry PI insurance so that if anything goes wrong, there’s recourse for you, your executors and your beneficiaries.
If you do set up trusts, there are tax returns to do, investment reviews to complete and lots more besides. A good lawyer will let you know exactly what the practical implications will be of whatever you’re thinking of doing, and maybe you’ll choose to opt for a simpler route instead.
Please don’t try to DIY your estate planning. Unless it is really simple, in fact even if it IS really simple, get a proper professional will written. Go to Farewill.com and use the code meaningful20 to get 20% off. And if you’re considering anything fancier than that, seek professional advice – it’ll pay for itself many, MANY times over.
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