The Autumn Budget has arrived and many individuals and businesses in Essex are set to feel the pressures that come with it.

Careful estate planning is more important than ever as pension pots are once again in the firing line.

If you want to secure a legacy for your family and loved ones, it might be time to take another look at how your estate is set up.

Why has the Autumn Budget made estate planning more important?

Among some of the more eye-catching announcements in the Autumn Budget came the revelation that building up a pension pot is set to become more difficult.

Many people have used salary sacrifice, where they have opted to miss out on a pay rise and channel the increase into their pension instead.

A new £2,000 limit is being introduced in April 2029 and any amount of salary sacrificed above this will be subject to employer and employee National Insurance Contributions (NICs), making it only marginally more tax-efficient than receiving it as income.

This is combined with unspent pension pots falling under the scope of Inheritance Tax (IHT) from 2027.

While IHT was once the worry of the very wealthy, frozen thresholds mean that more people are likely to become subject to paying the tax if they are not careful with estate planning.

What are the legal considerations with estate planning?

Ultimately, estate planning centres around a well-crafted Will, but this can be supported by the decisions made when you are alive.

Trusts are becoming an ever more popular way of preserving your financial legacy and passing down more value to the next generation.

If well-constructed, a trust is not considered part of your estate for IHT purposes.

As pensions become less efficient and more challenging to cultivate, a trust could be a better option.

Trusts also have the added benefit of being controlled by you posthumously.

You can create specific criteria for accessing the trust, such as specifying the age a beneficiary has to be before they can access the fund or any other reasonable criteria you determine.

This makes trusts a great way of bequeathing funds to children or grandchildren who may be too young to benefit from the inheritance when you die, but could make better use of it later.

We expect many people are going to be revisiting their Wills in light of the Autumn Budget and we would recommend this is done sooner rather than later.

At Palmers, we are here to help support you in crafting a Will that captures your wishes and ensures that your legacy is preserved exactly how you would want it to be.

Protect your legacy by speaking to our team today!