Ever Given A Birthday Present That Someone Actually Wants?

Planning your legacy could be rewarding and appreciated than you might think.

Bill Gates has got an unusual goal. He wants to run out of money. Although when you’re worth a reported £113 billion¹, that’s easier said than done.

It’s unlikely any of us will match the philanthropy of Microsoft’s founder. But on whatever scale, planning the legacy you want to leave can be hugely fulfilling, even if you’re not around to see your wishes come to fruition.

Charity begins at home, as the saying goes, and it’s understandable that individuals look to their family first when it comes to leaving a legacy of financial support. It can be life-changing to those you leave behind, and adds another tangible, positive memory of your life and achievements.

Imagine being the one who provided the vital cash injection that enabled your grandchild to buy their first home. Or thinking even further ahead, you could invest the funds during their childhood that grows into a substantial retirement pot for them later down the line. Putting in place such plans really can make a huge difference to the future lives of your loved ones.

Thinking further afield, perhaps you want to make a substantial donation to a charity close to your heart and know that money was going directly to a good cause.

Whatever your wishes, the key component of estate and legacy planning is an up-to-date will. It specifies how you would like your assets to be distributed after your death, ensuring your wishes are fulfilled and helping avoid disputes among family members. That is particularly important nowadays, when there are many blended families with children from previous marriages.

“A properly written will is the bedrock of effective estate planning,” says Sam Fitzgibbon of Pinnacle Wealth Management. “What’s worrying is that less than half (47%) of people in the UK have a will². When asked, the most common reason given for not doing so is simply that people haven’t got around to it.”

Sam highlights the risk of dying intestate. “Having your estate distributed solely according to intestacy law will almost certainly ensure your wishes are not fulfilled. Yes, a will is for end of life, and people don’t like to think about that, but who knows when that will be? What people should think about is the headache and expense they will cause their families if they die intestate.”

But as well as arranging the legacies you want to leave through your will, there may be the opportunity, need and desire to gift money during your lifetime; something that provides the additional fulfilment and pleasure of seeing that money enjoyed and valued.

“Estate planning can also be about making gifts during your lifetime, which can have the added benefit of helping reduce an Inheritance Tax liability,” adds Sam. “There are various gifting exemptions you can take advantage of, and there may also be opportunities to use trusts to provide tax benefits and ensure that assets are protected and distributed appropriately.”

While we can’t control every aspect of how we will be remembered, with the right plans in place, there are steps we can take to have a lasting and positive impact on the financial future of the people we leave behind.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

The writing of a Will or Powers of Attorney involves the referral to a service that is separate and distinct from those offered by St. James’s Place. Wills and Powers of Attorney are not regulated by the Financial Conduct Authority.

¹ Bloomberg, July 2022

² Legal & General, October 2022