How to navigate financial conversations with your family

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, contemplating 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 Power of Attorney
Facing a decline in 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.