After recently losing their beloved spouse, our client found themselves navigating a complex and emotional journey. Along with the grief, they now faced critical financial decisions to secure the future of their children and grandchildren.
Background
Our client, now a bereaved parent of two adult children with growing families, had worked hard during their life to ensure that they could live a comfortable retirement.
They were fortunate enough to have sufficient income to cover their expenditure, and they had built up large savings, investments and pensions to fall back on in the event of any emergency. These plans had not been reviewed for some time, however.
Their spouse had died unexpectedly and having never been involved much in financial planning before, our client was unsure about Inheritance Tax rules and sought guidance on structuring their estate effectively.
Key Needs
Our client’s primary concern was to ensure their estate was structured in a way that would preserve as much value as possible for their children, whilst minimising any tax obligations.
Our client was also concerned about future changes in tax allowances, and so they sought ongoing advice from us to ensure that their plans were kept up-to-date.
We offered our client the opportunity to have one or both of their children at our meetings, to provide them with support as well as ensuring that the entire family were involved with the various legacy planning decisions.
Our Solution
We reviewed our client’s estate in light of available Inheritance Tax allowances, guiding them on annual gifting options, and helping them explore how their investments could be structured to be tax-efficient.
We spoke to our client about setting up a discretionary trust for their grandchildren, which allows flexibility in allocating funds to their grandchildren at the discretion of the chosen trustees. This approach provided our client with control over how and when their assets would be distributed, aligning with their desire to support their grandchildren’s key milestones, such as education, career development, and purchasing their first homes. We suggested that our client appoint one of their children as a co-trustee, allowing them to play an active role in overseeing the trust’s future use.
Our client was also fortunate to have few health concerns, and so we looked at the cost of Whole of Life insurance. We recommended that the Whole of Life policy was held in trust, so that in the event of our client’s death, the proceeds could be paid straight to their beneficiaries and allow them to pay some of our client’s Inheritance Tax liability without delay or any complication.
Finally, we introduced our client to a local will writer. We explained the importance of ensuring that their Will and Lasting Power of Attorney (LPA) documents were up-to-date and accurately reflected their wishes, which provided both them and their family with peace of mind.