Most People Not Prepared for Estate

Easier.com, Dec 23, 2008

More than a year following the introduction of the IHT or Inheritance Tax transferable nil rate band (NRB), nearly three out of five people are still completely unaware not only of the new rules, but also the tax implications, according to recent research from Standard Life. These changes were initially introduced in the Pre-budget report on the 9th of October in 2007, and were designed to allow the estate of the surviving civil partner or spouse to claim unused nil rate band or NRB from the estate of the first spouse.

This applies in any case where the NRB of the first civil partner or spouse to due was not fully used upon calculating the IHT liability for their estate, bringing the enhanced nil rate band of the surviving spouse to as much as £624 000 which can make a significant difference when it comes to planning one's estate.

The latest research report on Wills and Trusts from Standard Life is also showing that while three quarters of all people would turn to a solicitor for advice on the estate planning process, and while as many as 54 percent would consider turning to a financial adviser, nearly half of them would prefer to use the internet in order to conduct their own research, so of all respondents answering the survey, as many as 47 percent were doing their own research when looking for information on the estate planning process. In addition, nearly two thirds of all respondents were completely unaware that the IHT exemption actually exists for any gifts that are made from left over income.

The head of estate planning at Standard Life, Julie Hutchison said that it is disappointing that the changes that have been introduced are not yet being fully understood by so many people. Research has been highlighting this distinct lack of awareness of the benefits associated thorough estate planning as well as the importance of seeking financial advice so that clients can significantly reduce their liabilities and save unnecessary paperwork and IHT for their loved ones.

Less than half of people have a current will drawn up, and almost a quarter of all people plan to leave money to a charity despite the credit crunch. Nearly one in ten people have experienced difficulties relating to financial and legal affairs for elderly relatives, and over half of these relatives do not even yet have power of attorney in place.