Austen Birkett Financial Planning Ltd - Independent Financial Advisers

Inheritance tax planning – keeping control of capital by planning early

A solicitor introduced us to a couple who wished to discuss inheritance tax planning. The solicitor had updated the clients’ wills.

The clients were keen to start considering inheritance tax planning but at this stage of life felt that they were too young to gift away capital themselves. They were unsure of using trust funds where they felt the trust took away control and the access to their capital.

We conducted a full financial review and the clients were in a better financial position than they had first thought. They could see that they would have sufficient income in retirement to meet their outgoings and objectives. Even so, they still did not want to give away the control and access to any of their capital. In terms of inheritance tax planning, the clients were relatively young. Thankfully, in terms of health, they were both enjoying excellent health.

We recommended that the clients implement a joint life whole of life insurance policy. The payment would be made on the second death and go straight into a trust. The monthly premium was affordable both now and in the future, based on income and outgoing projections.

This allowed the clients to meet their objectives and put in place a policy that was guaranteed to pay a lump sum to a trust.  They were happy with this type of arrangement as it did not take control of their capital. The payment would be made on the second death and would not be subject to the delays beneficiaries may face during probate. The clients took our advice as they felt the policy ‘was not another insurance policy’ and viewed it as a future investment for their children.

As the clients become older they will be able to make further use of trusts, as their needs change and become clearer. This will be arranged with their solicitor and ourselves, working together for the clients.

The above case study is for information and illustration only. It is not intended to be individual advice and it should not be taken as such. If you have any questions relating to your own circumstances, please contact us.

"On behalf of my wife and myself I would like to express our appreciation and gratitude for your professional guidance and that personal touch of excellence in dealing with my pension arrangements. Thank you once again for being our financial adviser."

Mr & Mrs S
Nottingham

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Austen Birkett Financial Planning
Trebeck Hall
Bishops Drive
Southwell
NG25 0JP

T 01636 812255
E advice@abfp.co.uk