This case study is an excerpt from Cascading Your Wealth: How to Build a Family Wealth Plan for the Next Generation by Marlene Outrim.
Dealing with the investments of someone who has received no advice can be a nightmare. You might unearth an array of savings accounts, shares with and without certificates, and will rarely find full details anywhere. They may have sold some of their investments, but you will not know until you try to contact the companies or managers. There many be land or property to deal with, value, and sell: but where are the deeds?
The case of James and Emilia
The attorneys for James and Emilia found three current accounts, five savings accounts, and twenty-six other investments.
We wrote to sixteen different companies for information on the holdings and had to send certified copies of the Powers of Attorney to each. Every page had to be certified. It was time-consuming but had to be done.
Putting together a plan
Trying to put these investments in order and assess what the couple should keep or sell was step one. Working out how much ready cash the attorneys would need for care costs and ongoing expenditure was step two. Analysing all the information and working out the tax positions was step three.
Step four was putting together the Family Wealth Plan the attorneys so badly needed. Once each stage was implemented, finally it was a simple matter of regular reviews.
The attorneys could access the couple’s money, had funds to pay care fees, and we even carried out some IHT mitigation using Business Relief investments. It was a toss-up whether to sell all the investments and accept taxable capital gains (some capital gains you do not have to count on death, so might have been better to leave invested). But since the attorneys needed regular and ad-hoc access to the funds, it was important to provide for those. Some shares could be switched into ISA wrappers gradually.
Investing would be straightforward once the attorneys had established the level of risk they could bear and their capacity for any losses. A full and frank discussion finally determined this.
A positive outcome
They ended up with two current accounts, two savings accounts, and the rest merged, but properly diversified and professionally managed. They could complete tax returns more easily, reduce the paperwork, and the funds across the portfolio were more tax-efficient. This meant fewer sleepless nights for the attorneys, who could concentrate on the wellbeing of their charges, pay bills promptly, and deal with any pressing requirements such as new spectacles or dental work for their relatives.
Putting together a strategy, including an investment element, was something they could not have managed alone.
What next?
If you’d like to read the full book and learn more about how building your Family Wealth Plan can help you effectively cascade your wealth to the next generations, you can purchase a copy here.
To get started on your own Family Wealth Plan, or if you have any questions, get in touch with us directly on theteam@uniqfamilywealth.co.uk or 02920 782330.
Our phone lines are manned 9:00-17:00, Monday-Thursday. Please note we operate a four-day working week.