Estate Planning
At Somerset Asset Management, estate planning isn't just about money; it's about ensuring that your wishes for the distribution of your assets to your family, loved ones, and charitable parties are honored in the long term.
Regardless of the size of your wealth, estate planning is a crucial part of an overall financial plan and should be considered carefully and revisited regularly.
A detailed estate plan that incorporates a will drawn up with expert legal assistance provides clear instructions for passing on your assets while supporting any philanthropic goals you may have.
What Does Estate Planning Involve?
Estate planning involves organizing the future distribution of your assets to eliminate uncertainty for those you leave behind, maximize value, and clearly define your wishes. It aims to simplify the administration process, minimize estate taxes, and provide funds to cover other potential costs and liabilities. Key elements of estate planning can include updating wills, setting up trusts, and deciding who will act as the executor when the time comes.
Additionally, detailed estate plans prepare for issues such as determining who would be the guardians of minor children if necessary and implementing plans to provide funding to support their education and other needs.
Estate Planning Checklist
Drawing up an estate plan that reflects your goals and values can be a sensitive and complex process that is best attempted with the full inclusion of your wider family or those who will be materially affected or have legal responsibilities when the time comes. Ensuring everyone knows your intentions can prevent arguments, legal challenges, and unnecessary expenses at probate.
Once you have a clearly defined vision for your family's future, you should always seek guidance from professionals such as estate planning attorneys, tax advisors, and financial advisors.
Here are some common considerations when calculating the value of your estate:
Life insurance can cover potential tax liabilities or other costs, such as paying an outstanding mortgage.
Work out how much your current yearly expenses are to understand how much your dependents may need to maintain their lifestyle after your lifetime.
Review the value of your assets and liabilities, as this will affect the overall value of your estate. Bear in mind that valuations can change dramatically over time.
Based on the estimated values and the tax regulations in your country, you should now know what the potential tax liability could be and how much your dependents will need to cover them without having to sell the family home.
This is the time to consider whether transferring assets, setting up trusts, increasing insurance coverage, or other actions should be taken to provide for your loved ones.
Regularly Review Your Plan
Now that your estate plan has been reviewed and updated, you can relax knowing your loved ones will be looked after financially.
However, estate planning is not a one-off event that can be done once and forgotten. As time passes, tax laws evolve, the value of investments and property changes, and the dynamics of your lifestyle and family may take different turns.
You may have children or grandchildren, get married or divorced, come into a windfall, or experience one of many situations that materially affect how you wish your assets to be distributed or the people you want to benefit.
We strongly recommend revisiting your estate plan every year or whenever you experience a significant life event.
For more information on estate planning and how we can assist, please contact us at info@somersetassetmanagement.com.