How to leave an inheritance?

Options
matucana
matucana Posts: 22 Forumite
First Post First Anniversary Combo Breaker
in Savings & investments
Hi, can anyone suggest the best way to leave a windfall for my children when I die?

They are grown up (just!) and have left home so not technically my dependents......I am unlikely to ever be a home-owner or have significant assets I could potentially leave them.

Should I stick with my life insurance (and write the policy in trust) which is up for renewal or is there a more effective way considering interest rates are so low?
«1

Comments

  • tacpot12
    tacpot12 Posts: 7,972 Forumite
    First Anniversary Name Dropper First Post
    Options
    Life insurance is your best option. Writing the policy in trust will only be of benefit if the payout (plus any assets you expect to leave) will be above the Inheritance Tax threshold: currently £325,000, but it is simple to do, and might save some tax if you also have an unexpected windfall.
    The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.
  • steampowered
    steampowered Posts: 6,176 Forumite
    First Anniversary Name Dropper First Post
    Options
    If you are already paying into a life insurance policy, don't just cancel it willy-nilly, make sure you understand what you'd lose out on/get back by cancelling it.
  • atush
    atush Posts: 18,726 Forumite
    Name Dropper First Anniversary First Post
    Options
    Do you have a work pension?
  • matucana
    matucana Posts: 22 Forumite
    First Post First Anniversary Combo Breaker
    Options
    atush wrote: »
    Do you have a work pension?

    Yes, I am enrolled in Nest. I was also paying into a private pension but had to take a break as I can't afford the contributions at the moment...
  • matucana
    matucana Posts: 22 Forumite
    First Post First Anniversary Combo Breaker
    Options
    steampowered wrote: »
    If you are already paying into a life insurance policy, don't just cancel it willy-nilly, make sure you understand what you'd lose out on/get back by cancelling it.

    Yes, have no intention of cancelling it - it's up for renewal when I reach 50..
  • Alexland
    Alexland Posts: 9,653 Forumite
    First Anniversary Photogenic Name Dropper First Post
    Options
    matucana wrote: »
    Yes, I am enrolled in Nest. I was also paying into a private pension but had to take a break as I can't afford the contributions at the moment...

    Well if the names of the pension beneficiaries are up to date that would help.

    Ultimately apart from life insurance then there really is no way to pass on money you don't have. So to leave an inheritance you would need to focus on building your assets by maximising your income, minimising your expenditure and investing the difference wisely.
  • David_Aston
    David_Aston Posts: 1,160 Forumite
    First Post
    Options
    Op, presumably you have a Will?
  • digbydog
    digbydog Posts: 32 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    Options
    My understanding is that 'money purchased pensions' are currently free of inheritance tax. My guess is that would include NEST, but I don't know for sure. The children can then take income from your pension, after you have gone, and pay tax at the rate appropriate to them.

    My understanding of using life assurance for inheritance planning is that it can be costly.

    I have read that both trusts and using pensions for inheritance tax avoidance are both being looked at and future governments, of whatever colour, might close these.

    Please bear in mind that inheritance tax allowances have become increasingly generous and further 'improvements' are due in the next few year. It may be a problem that you do not have. This link explains it far better than I can https://www.moneysavingexpert.com/family/inheritance-tax-planning-iht.
  • pelirocco
    pelirocco Posts: 8,274 Forumite
    Name Dropper First Anniversary First Post
    Options
    matucana wrote: »
    Yes, I am enrolled in Nest. I was also paying into a private pension but had to take a break as I can't afford the contributions at the moment...

    Are you looking for the best way to leave the assetts you have now? , or are you looking to invest money to leave to your children ? , If the latter I would advise that you should be investing in looking after yourself for the future . You have said in this post that you cant afford contributions to your pension ? . If when the time comes you have something to leave , you need a will .
    Vuja De - the feeling you'll be here later
  • 6022tivo
    6022tivo Posts: 781 Forumite
    Name Dropper First Anniversary Combo Breaker First Post
    Options
    Has that not just been increased?
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.2K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.3K Work, Benefits & Business
  • 608.1K Mortgages, Homes & Bills
  • 173.1K Life & Family
  • 248K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards