Generational Financial Planning

Exploring strategies to secure your family’s financial future

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The amount of Inheritance Tax (IHT) paid by families has dramatically increased over the past decade, increasing from £3.1 billion in the 2012/13 tax year to £7.5 billion in the 2023/24 tax year.

This rise is attributed to growing asset values and stagnant IHT thresholds, coupled with many families delaying their planning.

Download our latest guide to look at how to maximise IHT allowances, strategic planning to reduce IHT, tax-efficient gifting and transfers, utilising pensions for IHT efficiency and additional strategies for reducing IHT.

Click here to download

The importance of drafting a Will

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Protect your family from uncertainty and potential conflicts

Many people still lack a properly organised estate plan despite the numerous benefits of writing a Will—such as getting our finances in order, planning our legacy, and ensuring that our loved ones are well looked after.

By taking the proactive step to draft a Will, you can protect your family from uncertainty and potential conflicts, ensuring that your legacy is preserved according to your exact intentions. If you haven’t done so already, now is the time to prioritise this important task and secure the future for those you care about most.

A way to get assets in order

Making a Will often prompts a financial review. It typically identifies gaps in people/s financial planning – often inadequate life assurance or disability income benefit cover. If they’re in an occupational pension scheme, they may need to update their nomination of beneficiaries form. Without a Will, Intestacy laws determine who inherits your estate and in what order.

If you don’t have a valid Will, then effective state legislation steps in and provides a series of rules with you may not wish to apply to your assets and your family. It’s also relatively inexpensive compared to the problems you can create for your family without making a Will.

Specifying sentimental gifts in your Will

We dedicate much of our lives to working hard to provide for ourselves and our loved ones. As we accumulate assets and cherished possessions over time, it becomes crucial to ensure that they are distributed according to our wishes when we are no longer around. Importantly, the gifts mentioned in a Will do not need to be limited to property or cash. This can also include sentimental items with significant emotional value but less material worth, These could be family heirlooms, personal mementoes, or any treasured possessions that we wish to pass down to future generations. By specifying these sentimental gifts in our Will, you ensure that these meaningful items are handed down to those who will appreciate them most.

Leave money to a good cause

While family and friends are likely to be the first considerations when writing a Will, many people also take the opportunity to give a helping hand to causes close to their hearts. For many charities, gifts in Wills account for a significant amount of their income. Without these legacies, much of their work would not be possible. Leaving money to charity could also cut your Inheritance Tax bill.

Some charities will even help you write a Will if you leave them a donation. By leaving 10% of the value of your estate to a charity, you could reduce Inheritance Tax payable on some of your assets from 40% to 36%.

You choose the legal guardians

A Will allows you to appoint one or more legal guardians for children aged under 18. Your chosen guardians will take over the role of bringing up the children on your behalf. This ensures you remain in control and entrust this significant responsibility to people you deeply trust. In addition, having a Will grants you the peace of mind that comes with knowing your children’s future is secured. By choosing guardians, you ensure they are cared for by individuals who share your values and vision for their upbringing.

You choose the executors

Choosing your own executor, the individual responsible for implementing the terms of your Will, can ensure that your estate is distributed by someone you trust. You can appoint people you know and rely on to be your executors and manage your estate. Alternatively, you can appoint professionals to serve as your executors. An executor plays a crucial role in managing your affairs posthumously, ensuring that your wishes are carried out accurately and efficiently. This includes settling debts, distributing assets, and handling other legal matters related to your estate.

“TAKING OUT A LIFE INSURANCE POLICY CAN FURTHER ENSURE THAT YOUR FAMILY IS FINANCIALLY SECURE. LIFE INSURANCE CAN SERVE AS A SAFETY NET, PROVIDING FINANCIAL SUPPORT TO YOUR LOVED ONES IN THE EVENT OF YOUR PASSING.”

You ensure partners are looked after

There’s a common misconception that the rules provide for a ‘common-law’ husband or wife. If you’re unmarried or in a registered civil partnership and don’t have a Will, your partner won’t inherit anything under the laws of intestacy. A Will ensures that couples who live together but aren’t married or in a registered civil partnership can leave their assets to each other. Taking out a life insurance policy can further ensure that your family is financially secure. Life insurance can serve as a safety net, providing financial support to your loved ones in the event of your passing.

A Will should be updated

A Will should be reviewed at least every three years and whenever there’s a significant live event, such as the birth of a child or when children become adults. Keeping your Will up to date ensures that it reflects your current wishes and circumstances. Amending a Will is straightforward – you can rewrite parts of it with something called a codicil. This allows you to make minor adjustments without drafting a completely new document.

Peace of mind

Making a Will can relieve a considerable burden on your mind. Completing a properly-arranged Will provides peace of mind, knowing that your assets will be distributed according to your wishes. Writing a Will places you in the driver’s seat for many important decisions, impacting not just your life but also those of your family and friends.

Once written, many people feel great relief, especially when they can cross it off their ‘to-do’ list. However, remember to update it as needed to ensure it remains relevant.

Looking to draft or update an existing Will?

Please contact us for further information on drafting a comprehensive Will and safeguarding your legacy for future generations. Whether you’re just beginning the process or looking to update an existing Will, we’ll help you navigate every step confidently and easily.

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Why is it important to have a Will?

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By taking the proactive step to draft a Will, you can protect your family from uncertainty and potential conflicts, ensuring that your legacy is preserved according to your exact intentions. If you haven’t done so already, now is the time to prioritise this important task and secure the future for those you care about most.

If you’d like to speak to us about your family’s financial future, get in touch to find your local adviser:


Find Your Local Adviser

Free Download: The importance of a Will

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By taking the proactive step to draft a Will, you can protect your family from uncertainty and potential conflicts, ensuring that your legacy is preserved according to your exact intentions. If you haven’t done so already, now is the time to prioritise this important task and secure the future for those you care about most.

We have produced a factsheet with everything you need to know about drafting a Will, available to download here:

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5 Financial Planning Conversations for you and your Family

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Discussing finances can evoke anxiety or discomfort, and this tension doesn’t ease when family members are involved..

How can you make financial planning conversations go smoothly?

  • Your Estate

Discussing who will inherit will help you avoid future disagreements, ensure your Will is up to date and minimise inheritance tax liabilities

  • Succession Planning

Building a succession plan that suits your needs ensures you have laid the firm foundations for your family’s future

  • Lifetime Gifting

It’s possible to gift tax-efficiently during your lifetime using various allowances and exemptions

  • When I’m gone Information

Discuss where you’ll safely leave basic details of your bank accounts, savings, investments, and utility providers

  • Power of Attorney

You can put in place a power of attorney, a legal document enabling you to name one or more people to look after your affairs if you lose capacity

If you would like to discuss your family’s financial future and how we can help, please get in contact

Find Your Local Adviser

After Retirement – helping your loved ones

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Your financial adviser will have helped you plan a secure retirement lifestyle and naturally your thoughts will now be turning to how you can help your family now and in the future. Your adviser will guide you through key stages including 

  • Estate planning 
  • Legislation changes and their impact 
  • Tax implications 
  • Gifting 
  • The role of Wills, Trusts and Lasting Powers of Attorneys 

Your adviser’s role is to ensure you enjoy your retirement and bring expertise into successfully passing on your wealth in the right stages. 

If you would like to discuss your and your family’s financial future, please get in touch.

Find Your Local Adviser

Financial Planning conversations you need to have

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Protecting your legacy and boosting your children’s financial security

Discussing finances can evoke anxiety or discomfort, and this tension doesn’t ease when family members are involved. Nevertheless, parents of adult children are responsible for discussing their financial future – particularly retirement and estate planning. Doing so ensures their children can provide support or fulfil their wishes as needed.

Open conversations can provide financial planning opportunities and improve your loved one’s future finances. The sooner you talk about money, the better your chances are of protecting your legacy and boosting your children’s financial security.

How can you make financial planning conversations go smoothly?

Your Estate

Let’s begin with inheritance, which is a hugely emotive subject. While discussing who will inherit a portion of your estate after you have passed away might seem difficult, doing so could prevent future difficulties or disagreements.You can explain your plans and why you have made certain decisions. This could also provide an opportunity to consider if your will needs updating. For example, you might need to amend your will to ensure your estate can benefit from the residence nil-rate band, which could reduce your estate’s Inheritance Tax (IHT) bill.

Lifetime Gifting

Although you’ll want to avoid giving away money that you might need in the future – towards care costs, for example – you might wish to consider passing on some wealth to future generations within your lifetime. Using pensions,Trusts, and life assurance are just some ways you can do this.This can be complicated, but we can work with you to give you peace of mind that you’ve laid the firmest foundation for your family’s future.

It’s possible to gift tax-efficiently during your lifetime using various allowances and exemptions. For instance, you can give away up to £3,000 per year free from IHT. Additionally, you can make small gifts, such as potentially exempt transfers (PETs), become exempt from IHT if you live for at least a further seven years after making the gift.

Power of Attorney

Dealing with a deterioration in mental capacity can be particularly tough on your family. If you can no longer make decisions for yourself, you’ll want to ensure someone you trust is legally in this position. You can put in place a power of attorney, a legal document enabling you to name one or more people to look after your affairs if you lose capacity.Without this document, an application must be made to the Court of Protection (the sheriff court in Scotland), which can be a complex, costly, and lengthy process for your loved ones.

“When I’m gone” Information

Discuss where you’ll safely leave basic details of your bank accounts, savings, investments, and utility providers. Compiling a list of this information is time well spent and could be invaluable to your family if you lose capacity or pass away. Talking to your family about inheritance might seem difficult, but we can help start the conversation and guide your through what may be an emotional process.

Succession Planning

Building a succession plan that suits your needs ensures you have laid the firm foundations for your family’s future. It’s crucial to regularly review and update this plan to adapt to any changes in your personal circumstances or legislation. The planning process leads to understanding each family member’s motivations and personal drivers. This will enable you to assess the direction of your vision and the options available to your family to create a plan for your family’s future.

Will you have a financially secure and fulfilling retirement?

Please contact us for more comprehensive advice on managing your family’s financial future, including estate planning, lifetime gifting, and setting up a power of attorney. We’ll assist you in navigating these challenging discussions and ensuring your financial legacy is secure.

Find Your Local Adviser

Free Guide: Estate Planning

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What is the importance of estate planning?

Estate planning is about more than just tax. It is about making sure the people left behind are financially supported, that your assets are protected and that the tax your estate pays is fair.

Wealth preservation and wealth transfer are becoming an increasingly important issue for many families today.

Your estate consists of everything you own. This includes savings, investments, pensions, property, life insurance (not written in an appropriate trust) and personal possessions. Debts and liabilities are subtracted from the total value of all assets

There are various ways to legally avoid paying inheritance tax and we have produced a free Estate Planning guide to support you with Inheritance Tax Planning: Download Here

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Preserving Wealth for Future Generations

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Start your estate and inheritance planning as early as possible and implement in stages

The UK Treasury has been receiving record-breaking Inheritance Tax (IHT) receipts. IHT receipts amounted to approximately £7.09 billion in 2022/23, compared with £6.05 billion in the previous financial year.

For individuals and families who have to pay it, IHT can be emotionally challenging, often requiring the sale of cherished family assets to settle the tax bill. That’s why starting estate planning early and implementing it in stages is essential. Also, having an open conversation about estate planning with family members is very beneficial but depends on family dynamics and wealth levels.

Minimise Tax Liabilities

However, families should take proactive measures to minimise the possibility of facing a substantial IHT bill. By planning ahead and seeking professional advice, individuals can ensure their assets are managed to minimise tax liabilities.

Creating a comprehensive wealth strategy involves considering various factors.

Lifetime Cashflow

We can help you assess your assets and income to ensure we support your desired lifestyle throughout your lifetime. By understanding your cash flow needs, we can assist in structuring investments and creating a sustainable financial plan.

Lifetime Gifting

Gifting can be a valuable tool in wealth planning, allowing you to reduce a potential IHT tax burden. We can guide you on the various gifting allowances and exemptions available, such as the annual gifting allowance, wedding gifts and gifts from normal expenditure out of income.

Trusts

Most trusts offer flexibility and control over how your assets are distributed. They can also help reduce taxes on inheritance. This excludes Absolute Trusts, where control over assets is discretionary. Working closely with us, you can explore different trust options and understand how they can be incorporated into your wealth planning strategy.

Pensions

Pensions are important in wealth planning, offering tax advantages and the potential for long-term financial security. We can help you navigate the complexities of pensions, including risk assessment, accessing pension funds and maximising tax benefits.

Protection Cover

Protecting your loved ones in the event of death or illness is crucial. We can advise on selecting the right protection products to provide liquidity for IHT and other associated costs.

Business Relief

Incorporating business relief into your wealth planning strategy can be advantageous if you own a business or have qualifying assets. We’ll help you understand the eligibility criteria and how to leverage this relief effectively.

Financial Control and Estate Planning

Creating a Will ensures that your assets are distributed according to your wishes. Additionally, appointing a Lasting Power of Attorney provides someone with financial control over your assets and peace of mind if you cannot manage your affairs.

Estate planning is not a one-size-fts-all approach. Although there is no requirement to address IHT, proactive planning can minimise the tax burden on families. Seeking professional advice and taking steps early can help reduce the risk of leaving loved ones with a larger tax bill than necessary.

Do you want the peace of mind of tax efficiently passing on your wealth to your loved ones?

When you’ve worked hard to build up your wealth, you want the peace of mind to pass this on to your loved ones. There’s much to consider, especially if you have a complex estate. Who should it go to? And when? Is it sensible to pass on wealth during your lifetime? To discuss how we can help, do not hesitate to contact us.

Find Your Local Adviser

Family Focused Financial Advice

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Often when making financial plans, it can feel like a very individual decision. What you’re actually doing is planning for yours and your family’s future. All families are different. And that’s why it’s really important to involve your financial adviser with the whole family story.

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