Case Study: Family Estate Planning
Client:Married couple aged 62 and 55 with a home in the UK. They have three adult children and want to ensure that their estate is protected for them.
Scenario 1
This client had concerns over threats to their inheritance, such as remarriages, divorces, creditors, and other outside claims. They want to retain control of the property whilst ensuring that their children will inherit.
Solution – Lifetime Trust to protect the family home and other valuable assets from potential financial damages. This trust lasts for 125 years but can be extended on request. This provides reassurance that the future generations of their family stay protected.
Scenario 2
Since the client’s adult children have property of their own and are likely to reach the inheritance tax thresholds, the clients do not want to leave them with a complex probate process (6-12 months long before the inheritance can be passed on) and compound their inheritance liabilities paying 40% tax.
Solution – Lifetime Trust may avoid the need for probate on the property in many cases and can bring the inheritance outside of their beneficiary’s estate for inheritance tax purposes.
Scenario 3
Most of the investments that will fund their retirement are in Mr’s name. This is a cause for concern because they will struggle to meet their retirement income needs if they lose mental capacity and can no longer instruct withdrawals from these accounts.
Solution – Property & Financial Lasting Power of Attorney will allow him to appoint his wife as his power of attorney, meaning that if he loses mental capacity, she can step in to administer the assets in his name.
Outcome
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- Their new Wills are now up to date with their circumstances and wishes, making it clear who will receive the inheritance.
- The lasting power of attorney that Hoxton registered with the office of public guardian for them means that the important retirement plans they have in place can continue even if someone loses mental capacity.
- Since the children were already over their inheritance tax allowances, the £700,000 property passing via the trust provided potential inheritance tax savings to the children’s estate of £280,000.
- The use of the lifetime trust protects against:
- Remarriage and sideways disinheritance of the children
- Bankruptcy
- Divorce
- Creditors
- Tax bills
- Probate costs
If you relate to the above case study, contact us and learn how we can help you here.
Disclaimer
The views and opinions expressed should not be construed as investment or financial advice. The information contained is for educational purposes only.
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Disclaimer
The information on this page is directed only at persons outside the United Kingdom and must not be acted upon by persons in the United Kingdom.
