When it comes to thinking about the dreaded inheritance tax, most people think they will be safe from it and don’t need to worry about how to distribute their assets upon their death. They believe the current threshold of £312,000 per person is more than enough to cover everything they own. But that’s not necessarily the case, and some people end up with a nasty surprise when a relative dies and the sum total of what they own is added up.

The surprise often comes in the form of their possessions. Most of us have at least a fair idea of what our property is worth, and we only need to check with our bank or building society to see what our current and savings accounts hold. But when it comes to material possessions it’s a much harder figure to calculate.

Most people have hobbies of some kind – whether it’s collecting old teapots, soft toys or any number of other weird and wonderful items. The value of these collections can be much larger than you might think, so it’s well worth itemising everything you have and consulting an expert to find out their true value.

As you can see, there’s a lot more to estate planning than meets the eye. You may wish for all your material possessions to be liquidated and the cash distributed between chosen parties. If, on the other hand, you want certain items to go to certain people, you need to make sure your will stipulates exactly which item should go to which person.

When you are listing your possessions, it’s helpful to walk round each room in your house in turn, to see exactly what you own. There may be other items you have forgotten about that you will need to add to your list. Even items which don’t seem to be worth very much can add up when you get an overall estimated value, and if it sends you over the inheritance tax threshold you will need to think about how to minimise the amount that would need to be paid in tax.

When you have a list of possessions and a good estimate of their value, it’s time to consult a professional regarding how best to distribute your assets when the time comes – making sure there is as little liability for inheritance tax as possible, and that your assets go to the people whom you want them to go to.

In short, making preparations for when you’re gone involves much more than just distributing the big assets. Everything counts, and the more comprehensive you can make your will now, the easier it will be to stick to your wishes when the time comes. Your relatives will thank you for it.

Disclaimer:
This article has been written for information and interest purposes only. The information contained within this article is the opinion of the author only, and should not be construed as advice or used to make financial decisions. Expert financial advice should always be sought and any links contained within this article are included for information purposes only.

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