It’s good to talk – BLOG – Martin Cornell
April 2, 2024 11:24 amHow to navigate financial conversations with your family
Money, a subject often seen as taboo within family conversations, is surprisingly more entwined in
your family’s affairs than you might think. Engaging in frank discussions about financial matters can
create opportunities for strategic financial planning, potentially enhancing your family’s financial
future. The sooner these discussions begin, the better the chances of safeguarding your legacy
and strengthening your children’s fiscal stability. Let’s delve into some potential discussion points.
Planning your legacy
Inheritance is a topic fraught with emotion. While discussing who will get a share of your estate
after your demise may appear grim, such a conversation can prevent future complications or
disagreements. This discussion lets you clarify your intentions and the reasoning behind your choices.
This is also an opportune time to revisit your Will. For instance, you might need to adjust your Will
to ensure your estate can leverage the residence nil-rate band, possibly reducing your estate’s
Inheritance Tax (IHT) bill.
Gifts that keep giving
While it’s essential to avoid depleting funds needed for future expenses like care costs, contem-
plating the transfer of wealth to future generations during your lifetime is worth considering.
Employing pensions, trusts and life assurance are a few ways to achieve this. Although this
process can be intricate, we can collaborate to provide peace of mind, ensuring you’ve set a robust
foundation for your family’s future. Gifting tax-efficiently throughout your lifetime is feasible, using
various allowances and exemptions. For instance, you can bestow up to £3,000 per year free from IHT,
make small gifts of up to £250 per person per tax year, or even make further tax-free gifts such as
potentially exempt transfers (PETs), which become exempt from IHT if you live for at least another
seven years after making the gift.
Establishing a Power of Attorney
Facing a decline in your mental capacity can be particularly challenging for your family. If you become
incapable of making decisions, it’s crucial to have a trusted individual legally appointed. You can
establish a power of attorney, a legal document that allows you to designate one or more people
to manage 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 could be a complex, costly and lengthy process for your loved ones.
Compile your ‘when I’m gone’ list
Discuss where you’ll securely leave essential information regarding your bank accounts, savings,
investments and utility providers. Drafting a list of these details is time well spent, as it could prove
invaluable to your family if you lose capacity or pass away.
Starting a conversation about inheritance with your family might seem daunting, but we’re here to
help initiate the dialogue and guide you through what might be an emotional journey. We’ll help you
create a succession plan tailored to your individual needs, reassuring you that you’ve laid the
strongest foundations for your family’s future.
Don’t hesitate to contact us if you require further information or guidance. We’re here to support
you in your financial planning journey. Contact us today to secure your family’s financial future.
CAVEAT
THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.
THE TAX TREATMENT IS DEPENDENT ON INDIVIDUAL CIRCUMSTANCES AND MAY BE SUBJECT TO CHANGE IN FUTURE.
ESTATE PLANNING IS NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.
