How To Approach Inhereitance Saving
When you’re nearing the latter years of your life, it’s time to seriously consider what you will be leaving behind for your children, relatives and or friends. The inheritance that you leave behind could really change the person’s life.
If you’re giving it to your children, they could use that money to buy their first house. They might use it to start up their own business and create more wealth for their own children. But once you’re gone, you’re gone and unable to change anything. This is why you need to get it right the first time as there are no other chances.
Inheritance saving can be done in simple ways or it can be done in complex ways. It all depends on how much money you want to give when you pass away and what the circumstances will be for that to happen.
The most common
The simplest way to save up money for someone else to inherit when you’re gone is to open up an ISA. An individual savings account is very simple. All you need to do is choose a plan regarding interest rates and the amount you want to save each month.
For example, plan A requires the account holder to save no less than £300 a month but has an upward limit of £500. The percentage you will receive is 2% if you stick to this obligation.
Plan B needs you to put into your account £1,000 each month as a minimum to keep the account eligible to receive the interest at the end of the year. The maximum might be £2,000. The percentage rate for this kind of larger savings account could be 3-5%. It’s a simple and very common way of saving up for your children.
How much will be taken?
The biggest worry you will have once you have decided the method of saving, is how much of it will be left when you’re gone? Inheritance tax is something that not many people understand or even know exists.
However, at Philips Trust you can get advice that fully explains what the inheritance tax laws are and how you can avoid paying the maximum by some careful planning. Some people might have £500,000 which they want to give to their children but are afraid that maybe only half of that will reach them in the end when all is said and done.
However though certain ways such as gifts, installments, the inheritance tax bracket you fit into the and recipients should all be factored in so you get the best kind of plan.
Begin right now
All too often people start to save up for their children too late. Do not leave just 5 or 10 years of savings to your children if you can help it. It should have begun when you were approaching your mid-life. Start taking it seriously now so you can have your plans set in motion and reap the benefits before a law is changed.
Inheritance saving can be easily done by a simple ISA account. It’s very easy to understand and the obligations are very clear. Consider what your options are for inheritance tax however and speak to a specialist who can lower the amount you have to pay.