The Process
Estate planning is a process. Ideally, a joined-up advice process, guided by a later life financial and legal specialist who is able to see the whole picture. The process always starts with an initial chat with your later life planning specialist.
You will be greeted by the lovely Laura and then met in our homely, living room style office by our kind and gentle adviser, James. This is a friendly, yet professional chat around your needs, your priorities, your goals, your risks. We will establish any specific issues you have. We will get a feel for your family dynamics and what makes you all tick. Our objective at this first introduction is to ‘get you’, to really know what makes you (and the family) tick. It is only after really establishing this relationship can we properly help you.
James will use his extensive later life planning experience to prioritize your objectives and goals for you. He will use his experience of advising hundreds of people in your situation to bring to light issues that you perhaps hadn’t thought of. You don’t know what you don’t know! He will summarise your situation, help you understand your situation and get a firm grip of what you are looking to achieve.
Common issues that come out of this initial chat are worries about so-called ‘sideways’ dis-inheritance, ensuring wealth, property and assets are guaranteed to passed to who you want to and not diverted or passed to someone else. People, but not everyone, are worried about care fees funding. Concerns around inheritance tax are common and becoming more and more important, especially in light of the new rules around pensions. Blood-lining planning, ensuring the children and grandchildren inherit. Worries about certain beneficiaries, perhaps mis-using inheritances or being in some way disabled or unable to handle money. Protecting against possible claims against your estate through contested Wills – another growth area in the legal profession! We also often see issues arising through long-term illnesses like dementia or Parkinson’s and how to protect wealth in these delicate situations.
Towards the end of the meeting, James will summarize the potential options and solutions for you, assessing their relevance to you and how different options and solutions may suit different objectives. He will give you time to listen, assess and think about what he is telling you. He will not talk in legal jargon; he will keep it simple in words that you will understand. At this time, James will make it clear any legal or financial planning costs involved in implementing any possible solutions.
Finally, James will then take you through the most relevant solutions for you, given your situation. These solutions might include ‘Essential Estate Planning’ – recommending simple or standard Wills. After all its better to have made a Will than not have one at all. He might suggest ‘Protection Estate Planning’ using Will Trusts to protect assets on death, for instance a Property Protection Trust (PPT) or a Flexible Life interest Trust (FLIT) or a Discretionary Trust (DT). He may advise on ‘Lifetime Estate Planning’ to include Asset Protection Trusts (APT), lifetime gift trust planning, life insurance in trust, pensions or perhaps one of a variety of Inheritance Tax planning services.
Essential Level Estate Planning
If only essential level estate planning is required, we might simply recommend standard Wills. This might be because you don’t have any of the issues we have spoken about above, or you simply decide not to address them for whatever reason. You may just prefer to keep things ‘simple’ or to carry out your estate planning at the lowest possible cost.
In a simple Will we will guide you in providing instructions on how and to whom assets will pass to your beneficiaries. You will appoint executors, those people or professionals to whom it is entrusted to carry out your wishes as set out in the Will. Any specific gifts or legacies will be catered for here too.
Protection Level Estate Planning
Many clients will recognize that they have valid issues and concerns and will accept the need to do something to protect their assets on their death. This is when Will Trusts can be highly effective.
Although including a Will Trust when writing your Will might at first glance appear to be complicated and confusing, it really shouldn’t be. In fact, it’s relatively simple legal planning. You are quite entitled to structure your affairs, both in lifetime and on death, in the most tax efficient way and also in such a way that protects your assets. Assets that you have worked hard to build up over your entire lifetime.
For more detail I strongly recommend you take a look at our Will Trust series where we break down the different types of Will Trusts one by one. I also strongly recommend that you don’t get too bogged down in ‘legalese’ – let us do the work – focus on your hopes, goals, risks, issues at the initial meeting with James and listen to what guidance he provides. Whether it’s a ‘Right of Residence Trust’, ‘Property Protection Trust’, ‘Flexible Lifetime Interest Trust’, ‘Discretionary Trust’ or a Young Person’s Trust there will be a Trust out there that you can include in your Will that can address any risks or concerns that you have for your legacy. Suffice to say, most Will Trust planning revolves around ensuring that the correct beneficiaries are guaranteed to inherit and not anyone else outside the family due to any number of potential future situations (the risk of so-called disinheritance). Protecting assets from potential care fees is another common issue for people.
A quick word on care fee protection planning. A Property Protection Trust can still be made in the Will even if one spouse is in care (i.e if the spouse in care has lost capacity and cannot sign the relevant legal paperwork). This can be done via a unilateral notice being served. Here, we can protect the property (the family home) from the risk that the spouse still living at home dies before the spouse in care, thus ordinarily bringing the home into care fee assessment.
Lifetime Level Estate Planning
After discussing with you your situation we may recommend lifetime Trust planning. These Trusts are similar to Will Trusts (Trusts set up through the Will on death) but here we are now talking about Trusts we set up in lifetime.
Again, it is best to not get too bogged down in the different types of trust. This is our job! Come to the first meeting with us armed with your current situation, both financially and also in terms of your life situation, your goals, needs, issues, risks and we will do the rest.
Please refer to our separate article on lifetime Trust planning. However briefly here, when considering lifetime Trust planning, think about what access you still require to the assets being placed into trust. Do you not need access to capital but still would like an income? Do you want to address an inheritance tax liability effectively? Who are the beneficiaries of the trust going to be? Are they fixed or do the trustees need flexibility over who inherits, how much and when?
Remember, as you might expect, lifetime estate planning is not all about trusts! In our uniquely joined up role as financial and legal advisers, we can help with pensions (especially with regard to the IHT rules changing in 2027), Lasting Power of Attorney, other Inheritance Tax planning strategies outside trust planning, care fee funding arrangements. It all links in when planning your estate finances.
We also often get asked about moving the family home into trust in lifetime. This can be arranged through an Asset Protection Trust. However, be warned, avoidance of care fees cannot be the principle reason for arranging an Asset Protection Trust (will fall foul of the deliberate deprivation rules and not be effective protection). Furthermore, if you are still living in the home, the ‘Gift with Reservation’ rules will apply and the trust will not be effective for Inheritance Tax planning purposes either. There are a number of disadvantages, tax, control and cost being just a few of them and there must be really compelling reasons why it might be advantageous to move your house into trust. Speak to James when you come in to see if this is right for you.
Complimentary Initial chat
Call 0117 3636 212 or email office@haroldstephens.co.uk if you are interested in discussing your estate plan. We can help you review what's needed to ensure you have a complete plan in place for peace of mind.
