Dividing your estate and assets is something you’ll want to get right the first time around.
Read on to find out everything you need to know.
Identify your assets
First, you’ll need to identify what’s actually in your estate. This could include:
- Real estate
- Business interests
- Personal property
- Intellectual property
You’ll also need to make note of financial assets like life insurance policies, retirement accounts, investment accounts, bank accounts and money owed to you.
Calculate the worth of your assets
The next step you should take is working out the worth of your assets – you should also include any sentimental items you may want people to have.
Choose your beneficiaries
Next, you’ll need to consider who you want to benefit from your estate. These people will receive your money and property when you die, so it’s important to think carefully.
Beneficiaries could include:
- Your partner/spouse/civil partner
- Your children
- Other family members
- Friends
- Charities
Think about division of assets
Once you’ve chosen your beneficiaries, you can begin thinking about division of assets. A gift you’d like to leave someone in your will is known as ‘legacy’ and there are several types of these:
- A pecuniary legacy – this is a fixed sum of money to a particular person. For example, you might leave £2,000 to each of your granddaughters.
- A specific legacy – this when you want to leave a specific item to a specific person. For example, you might want to leave your engagement ring to your daughter.
- A charitable legacy – this is when you leave a gift to charity in your will. It’s worth noting gifts to charity are exempt from inheritance tax.
- A residual legacy – this is when the rest of your estate is left to certain people. These beneficiaries will receive the ‘residue’ of the estate, which is the amount left after tax, debts and other legacies have been paid. If you’re leaving residual legacies to multiple people, you’ll need to say what percentage each person gets.
- A reversionary legacy – this is when you leave a legacy to someone else if the original person you left it for dies. For example, making arrangements to leave your house for your son if your wife dies.
Check inheritance tax rules
Before dividing your estate, it’s wise to look into inheritance tax regulations.
There is normally no tax to be paid if:
- the value of your estate is below the £325,000 threshold or
- you leave everything above the £325,000 threshold to your spouse or civil partner, or
- you leave everything above the £325,000 threshold to an exempt beneficiary such as a charity.
Inheritance tax can be difficult to wrap your head around, so talking to a wills and probate solicitors about this can help you understand your situation more clearly.
If you’ve been looking for probate solicitors to help you execute the will of a deceased friend or relative and need probate of will services, or you are writing a will and need legal advice, look no further than Richard & Lewis. We can ensure that both the will writing and probate processes are dealt with responsibly and accurately, providing you with the peace of mind you deserve. Contact us today to book an initial appointment.
