Legacy Planning

Mrs H was a widow. She lived alone in a semi-rural bungalow in Lancashire. Her brother had recently passed away leaving all of his assets to Mrs H.

Mrs H was already wealthy in her own right but as she worried about the future costs of care, she did not feel that she could afford to let this inheritance skip her and pass down the line.

We and the solicitor felt that Mrs H at 80 was being over cautious given her other assets. However, we advised the client to consider having the inheritance pass into a Discretionary trust rather than directly to Mrs H or the children. Mrs H took this advice.

Sadly, Mrs H died some years later. If Mrs H had not agreed to a ‘Deed of Variation’ in favour of the trust for this inheritance, her estate would have been subject to £80,000 in inheritance tax. The children were pleased not to have to pay the tax but during her lifetime, Mrs H had the peace of mind knowing that she could have accessed the trust if need be.

Mr & Mrs T were concerned that there could be a £150,000 Inheritance tax bill payable on their death. They had heard that they could give assets away and as long as they live for 7 years after the gift, the gift would fall outside of their estate for inheritance tax purposes. However, they did not feel that they could give any of their assets away. The vast majority of their wealth was in their house and the have only enough capital for themselves.

Because they didn’t want to give any capital away and at the same time, they didn’t want to burden the children with the Inheritance tax bill we advised a whole of life assurance policy which paid a lump sum into trust after both deaths. They felt this was good value and provided peace of mind even though it meant paying insurance premiums which they hadn’t anticipated.