Estate Planning Guide

Common indicators that your client needs estate planning financial advice • If your client has no Will, the chances are, they have not even started planning for their death and beyond. This could apply to a significant proportion of the client base of legal and accountancy firms as research has shown that just four in ten over-55s have an up to date and valid Will. • When major life events happen, many people are prompted to evaluate their lives and make or change plans for the future. A birth or wedding, for example, might modify inheritance intentions. • The acquisition of large assets, like a house, particularly in later life, brings up questions around the RNRB, any tapering away of the relief and how that affects other assets the client is looking to transfer on their death. • There may be occasions when a client seeks a lump sum for business or personal reasons. The client will need to decide whether to take a pension drawdown or take the funds from another source, as well as how to replenish them, all with the most beneficial tax consequences. • It is an unfortunate reality that there will be times when clients become ill. If the illness is terminal or likely to limit life expectancy, the IHT status of gifts could be affected and more effective IHT mitigation might be found elsewhere. LOUISE POLCARO DIRECTOR OF COMMUNICATIONS, STEP Within the estate planning sector, the value of building lasting relationships with other professionals cannot be underestimated. Good relationships can enable you to provide a better service to your clients and can often serve as a source of high-quality repeat business. Whenever beneficiaries receive an inheritance there is a key opportunity to add value for your clients and prospective new clients by referring work either in-house or to your external network. For example, a solicitor or accountant may be called upon to complete the estate administration. As part of this process, the beneficiaries of an estate may be inheriting a significant sum. Not only will they need advice in relation to their own Wills, but they may need onward tax planning and financial advice. Likewise, financial advisers have the advantage of seeing clients on a regular basis in relation to their wealth and income. Checking that clients have appropriate Wills or powers of attorneys in place and sign-posting to a qualified and trusted practitioner gives them peace of mind that their wishes will be carried out. One good example of how collaboration can work well is illustrated by one of our members, a financial adviser: ‘I am working on a case with a solicitor who is a trustee for a young man who keeps making demands upon the trust funds for frivolous expenditure. This causes tension between the trustees and the primary beneficiary as the trustee legitimately refuses to provide funds for such matters. The trustees called me in to show the beneficiary how long the money will last if such demands kept being made and to show that he will, in fact, need the money in future years when he and his wife anticipate starting a family. The client “saw the light” and the trustees now have a firm strategy to ensure they can best support the beneficiary when he really needs it.’ Collaborating with other professionals is also important for cross-border planning: if your client has cross-border assets, you may need another adviser who knows that jurisdiction’s law to prepare their Wills, or to provide tax planning and trust advice. STEP was initially conceived for just this purpose: to meet the need for those working in the field of trusts and estates to meet and talk with others about their work – be they accountants, solicitors, financial advisers or other specialists. The benefits of engaging with other practitioners to share knowledge and expertise across professional and geographic boundaries are clear. So, get out and get networking! But bear in mind that all contacts are not necessarily equal, and with new Corporate Criminal Offences carrying penalties for referring someone who subsequently deliberately facilitates UK tax evasion, there are very good reasons to ensure you network well! THE BENEFITS OF WORKING TOGETHER Thought Leadership 98 PROFESSIONAL CONNECTIONS Investors shouldn’t compromise their estate planning by just focusing on the tax efficiency of their solutions, and not looking at the diversity and performance of their investment choices – Due diligence is key. BELINDA THOMAS, HEAD OF SALES AND INVESTOR RELATIONS, TRIPLE POINT 99 PROFESSIONAL CONNECTIONS STEP... is the global professional association for practitioners specialising in family inheritance and succession planning. www.step.org