Wealth Planning -
Leaving a lasting legacy
Some people leave millions to hospitals, universities and other institutions so that their name can live on through “The Pennington Wing”. But for many of us, the idea of a legacy is more modest. It might be more about helping your grandchildren get their names on the deeds to their first home, rather than your name on a building.
When people think of estate planning, they often think of inheritance tax (IHT) mitigation, and while this can play a part of a legacy plan, it’s far from the whole picture. Ask any accountant, financial planner or tax adviser and they could all come up with a range of ways to shelter wealth from inheritance tax. However, not every possible solution would be aligned with your lifestyle, personal preferences or the needs of your beneficiaries.
More important, of course, is to ensure you can live the life you want – having access to income and capital when you need it – for the rest of your life. Once this is secure, you can consider structuring your assets to align with your wishes as to who else can access your wealth, when and how.
Whatever your ambitions are for your family wealth, it’s important to talk about how to achieve them. Business arrangements and family interdependencies are often more complicated than they might look from the outside.
If you have a business partner or family members who will be impacted if you become ill, or die, it’s much better to discuss matters now, rather than burden them with trying to untangle things when emotions are high.
There are some simple steps you can take to help make this easier.
Write a will and an accompanying letter of wishes
A will is a legal document that sets out your specific wishes as to the distribution of your property and the arrangements for any minor children in the event of your death. Dying without a will can leave your loved ones bewildered. Not only will they need to deal with the huge emotional toll of your death but they will also need to deal with the complexity of the division of your assets and personal items which will be subject to the rules of intestacy rather than your wishes. A will can provide certainty at an uncertain time.
A letter of wishes, while not binding, can help your loved ones understand your intentions with regard to things such as funeral arrangements, personal items, advice for guardians and executors. Unlike a will, this is not a public document, and remains confidential to the executors, trustees or family members.
Writing a letter of wishes, particularly in conjunction with your spouse or partner can air issues you hadn’t really previously discussed. Do you want to be buried, cremated, or leave your body to medical science? Do your partner and your children know this? If you are appointing guardians, it’s a chance to explain how you want your children to be raised, for example in terms of religion or education. It also gives you the chance to explain any surprises you may have left in your will.
Make a Lasting Power of Attorney
Should you lose mental capacity through accident or illness, your family will need to make arrangements at a time of heightened stress. In the absence of a lasting power of attorney (LPA), a deputy will be appointed through the Court of Protection to make decisions about your property and finances, and also your health and welfare.
If you have an LPA in place, you will have exercised control over who can make decisions on your behalf. There are two types of LPA; Property and Financial Affairs and Health and Welfare. Individuals can set up one or the other or both. Often the same attorney(s) are appointed for both, but you can have separate attorneys for each LPA if you prefer.
Creating an LPA gives you a great opportunity to discuss your expectations for things like later life care, medical treatments, where you want to live and expectations for your finances with your appointed attorneys. It provides peace of mind that your affairs are in the hands of those you trust, should the need arise.
Your Estate Plan
You might want to see your children enjoy an inheritance during your own lifetime, you might want to spend all of your wealth and enjoy it yourself , you might want to gift assets to charity, or maybe you simply want to split your assets among family members.
Understanding how to structure your assets so that they can fund your lifestyle as well as provide the legacy you want to leave is important. Do you feel secure with the knowledge that you have the right legacy arrangements and plans in place? Good estate planning can enable you to place the right wealth in the right hands at the right time. It allows you to consider your views on lifetime gifting, post death legacy and designing an IHT mitigation strategy through non contentious structures and gifting plans.
A professional wealth planner can help you build a plan that offers the right balance of control, access, flexibility and tax advantages designed to deliver an effective and controlled outcome for you, your family and your business.
Whatever your desires are for the future, involving those close to you, be it a spouse, parents, children, business partners, or other loved ones, ensures there are no surprises, and everyone has the financial support they need, when they need it.
If you would like a book a meeting with one of our qualified and experienced wealth planners to discuss your financial plans, please get in touch.
What does your dream retirement look like? Whether retirement will see you bungee jumping in South Africa, or trampoline jumping with the grandkids, taking time to plan now, gives your dreams the chance of becoming reality.
Coronavirus has created many challenges for businesses and an area of discussion that has rapidly escalated in importance is around protection.
To mark Pension Awareness Day 2020 we’re reflecting on the conclusions from '100 Year Life', a 2016 book by Lynda Gratton and Andrew Scott.
This content should be considered a marketing communication for the purposes of the Financial Conduct Authority rules. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. It is for information purposes only and does not constitute advice, a solicitation, recommendation or an offer to buy or sell any security or other investment or banking product or service. You should seek professional advice before making any investment decision. The value of investments and the income from them can fall and rise, and you could get back less than you invest. Past performance is not a reliable indicator of future results. Investment returns may increase or decrease as a result of currency fluctuations.
The contents are based on opinions or conditions as at the date of writing and may change without notice. To the extent permitted by law or regulation, no warranty of accuracy or completeness of this information is given and no liability is accepted for its use or reliance on it.
This content is confidential and may not be reproduced, further distributed, or published without prior consent from Arbuthnot Latham & Co., Limited. The distribution of this document and the offer and sale any investments in certain jurisdictions may be forbidden or restriction by law or regulation. It may not be sent to, taken into the United States, or passed to any US Person.
Arbuthnot Latham & Co., Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Arbuthnot Latham & Co., Limited DIFC Branch is regulated by the Dubai Financial Services Authority.