Bereavement

Aegis

MarkBargain wrote: »

One more thing - a friend of mine saw a financial advisor who wanted £3K in fees to invest in some funds. My friend got the same funds for no up front cost, and much lower annual charges. Careful who you listen to.

An initial fee should be in respect of fact finding, discussion and quantifying of objectives, risk profiling, assessing possible solutions, recommending the portfolio structure and funding into each tax wrapper, then finally recommending specific funds.

Of course you can buy the funds cheaper elsewhere - if you do that you're not paying for the rest of the advice process. Someone who doesn't need advice doesn't need an adviser.

xylophone

Your mother might like to check her state pension position.

She will reach state pension age in single tier - starts 6 4 2016.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181235/derived-inherited-entitlement.pdf

See page 12 of above

https://www.gov.uk/future-pension-centre

xylophone

The life assurance policy sounds like it was set up in trust - it might be worth looking at that to see what type of trust it was and whether it would be better in the long turn to retain the assets in the trust structure rather than in your mother's estate. It may of course be too late for that though!

Mother has already received the proceeds of the life insurance policy into her bank account.

In the short term, mother could hold the whole sum in NS and I Income bonds - she would receive the income gross monthly while she is waiting to decide what would be best to do.

http://www.nsandi.com/income-bonds

Aegis

xylophone wrote: »

Mother has already received the proceeds of the life insurance policy into her bank account.

Agreed, but it might feasibly be possible to unwind the payment back into the trust as an error on the part of the trustees. Long shot, and perhaps unnecessary, but worth exploring.

atush

I agree moving most of the money to NSI would be a good idea, as 400K would not be guaranteed in case of a bank failure.

I would say, if there are any ISAs in your fathers estate, these can now be passed on as ISAs and should do so instead of cashing the money out of ISA.

And as she has a lot of cash sloshing about, S&S isas should be opened for this year and next (even if she just puts 15K of cash into each) so as to not lose this year's allowance. It can be moved into shares later. Or even move platforms if necessary.

If she has no earned income, then the most she can out into a pension is 2880/3600 per year and she should do so. So setting one up for her on Cavenish online this tax year would be a good idea. Invest it in a vanguard series fund. 80/20 maybe as she has so much cash. If she can add the money into her current pension so much the better.

I say to do these things, as it will take you beyond April 5th to find your IFA, and to get his report back and your mother would lose the ability to shelter 18K from tax.

Use the private banker for banking. Dont use them for investments or pensions.

unbiased.co.uk for adviser. Contact at least 3, meet with at least 2.

egg93

Thanks for the comments. Clearly I have a bit of reading to do. To give a bit of context, the reason I am hesitant to see a FA immediately is that as the estate is not settled I don’t want to complicate matters with the lawyer dealing with my dad’s estate (Not sure that it would though?). The idea of putting the life insurance sum in the NS&I seems like a solid idea for the mean time until I have selected an appropriate FA. Does anyone have any experience with them (Quality of Service etc.)? What are the advantages of trying to reverse the life insurance back into trust? I guess at the minute I just don't want to make the wrong decision for my mum's future (Hence all the questions)

Thanks

MarkBargain

The NS&I investment bonds may be a safe temporary home, although the returns are only 1.25%. You may be better to put some (£15,000 now, £15,240 next month) in an ISA, as these pay a bit more interest.

http://www.moneysavingexpert.com/savings/best-cash-isa

wiltslass

Sorry to read of your loss. I had a similar situation some years ago. The approach I took in the short term was to invest the monies from the estate as they came in into an account paying monthly interest which I could withdraw the funds from easily and promptly when the estate was finally settled and final investment decisions were able to be made. I found the solicitor dealing with the estate helpful in terms of suggesting suitable advisors to assist with investment planning. I tended to think , and still do, do the research and keep it simple. There is a website which will list IFA's in your area and the areas in which they are qualified to give advice .Unfortunately I cannot remember the website address, others will know. I agree that opening an ISA with 15k in this tax year would be a good idea. The fine tuning can be done later.

SeniorSam

Do please be careful of IFA charges. These can vary a great deal and it is important to fully understand the details of any investment recommended to you before you agree to make that investment. Do not appoint the Bank to help you as their charges are extreemly high.

The more you can keep in Trust, means that it is protected for the children, but could be loaned to you by the Trustees, (your children and you) . It would not form part of your estate and would grow in the Trust and not in your estate.

Your Will is important and you should consider if it needs any changes in view of the assets you hold and what you will need to live on.

Don't do anything at all without discussing it with your family first. Even if you decide not to heed their opinion, the danger would be to just DO IT, before discussing and understanding it. A good IFA would suggest you discuss it with your family before taking action.

Take care. Have a look at this forum http://forums.moneysavingexpert.com/forumdisplay.php?f=217

Sam

enthusiasticsaver

Sorry for your loss and we were in a similar position when my Mum lost my Dad at a relatively young age 20 years ago. She was 58 and my Dad was 63 and Mum inherited a lot of money all in one go when she was not used to handling it and we struggled to find some good advice. We all were grieving as my dad's death was a total shock and could not really think about what to do about money. My Mum went with Nat West as she had banked with them for years and invested a large sum with them which did ok but the fees were high so I would suggest as others have that you look for an IFA. After 7 years we sorted her finances out in a more cost effective way.


Another thing I would mention is inheritance tax as with an estate that large it will fall over the threshold of £325,000 but if all of your dad's assets go to your mum you can do as we will when my mum eventually goes (not for a long time yet we hope ) and use your dads unused inheritance tax threshold by filling out a form on the gov.tax website when you apply for probate for her which will double the allowance eventually for you and your siblings to £650000. In the end though my mum gifted significant amounts to me and my siblings as she got older - she is 80 this year and once she knew her pension would be more than sufficient for her needs in order to minimise inheritance tax as far as possible she gifted under the Pet rule where she had to live for 7 years before us incurring inheritance tax on it. She made the final tranche 6 years ago so we are almost out of that and it has benefitted us and my children and niece and nephew immensely in costs of university education, house buying etc.