Wills, Trusts & IHT Planning - Expensive!

DreSaver

Dear Fellow MSE'rs,

Would appreciate your advice after the recent death of close family member I have realised I must sort
out my finances including a Will and appropriate IHT planning via trusts.

I've had a large company look through my requirements and they have recommended the following -

Will with Distribution to Pilot Trust (s)
Flexible Family Trust
Family Interest in Possession Trust
Severance of Tenancy Service ( Mutual )
Family Investment Probate Trust
Family Life Assurance Trust
Deed Of Assignment ( Life Assurance )
Lasting Power of Attorney - Health & Welfare
Lasting Power of Attorney - Property & Financial

This seems like a lot and the cost is £4.5k - It would be prudent to assume I am being conned, but sometimes things are complicated and to legally minimise IHT i suspect things need to be done correctly - but surely I should not be paying anything like this amount?

I appreciate that my individual circumstances define the complexity and hence cost but any advice is much appreciated!

DreSaver

chesky

You should post this on the Deaths, funerals and probate section - you'll probably get more help there.

caprikid1

What is the value of the estate ?

badmemory

Is your estate even likely to come anywhere near needing to pay IHT? I strongly suspect not. 5 trusts & then I expect they want to be executors of your will. Is this all because you have young children? Are they even solicitors?

Mojisola

DreSaver wrote: »

This seems like a lot and the cost is £4.5k - It would be prudent to assume I am being conned, but sometimes things are complicated and to legally minimise IHT i suspect things need to be done correctly - but surely I should not be paying anything like this amount?

Probably right - talk to a local, recommended solicitor and see whether you need all these things and, if so, how much they would charge.

Kynthia

The cutting Tax board might also be a good place to post this. However the value of your estate is very relevant to whether these are necessary. £4.5k might be a bargain if it saves a whole lot more in inheritence tax, ensures no-one has to pay to apply for directorship should you lose capacity, means your wishes are followed after your death, any children from outside the marriage will inherit no matter which spouse goes first, your dependants don't have to wait for probate to receive some needed funds after your death, etc. It all depends on how much you need tgese things.

Some of these things you can do yourself for less money. It's cheaper but more time consuming and fiddly so some people are happy to pay a professional. The power of attorney forms are a good example of this. Also if the Severence of Tenancy Service is to change your property from Joint Tenants to owning as Tenants in Common then I think you can also do this yourself.

Robinette

My dad's 'financial adviser' recently told him that he had a shortfall of £200k in his inheritance tax planning and that it would cost him £1k per month to take out a policy to pay this (dad is 86).

I did some research and found that the adviser had not been aware of the residence nil rate band, that the way dad's will was written created a life interest trust, and various other factors specific to dad's situation. The net result was that there would be no inheritance liability.

I found these links particularly useful:

https://www.taxation.co.uk/Articles/2017/10/10/337068/residence-nil-rate-band

https://www.gov.uk/trusts-taxes/trusts-and-inheritance-tax

https://wards.uk.com/online-services/legal-guides/life-interests-rights-occupation/

https://www.gov.uk/guidance/inheritance-tax-residence-nil-rate-band

Keep_pedalling

Sounds like you are dealing with someone like SJP, expensive non independant advice. Salesmen rather than advisors.

You certainly need to be aware of trusts as a form of IHT planning, they can be expensive are can backfire badly.

Use a local solicitor for your wills, the LPAs you can do yourself. For the rest get a second opinion from a local IFA, and make sure they are independant advisors

Just how big is your estate? A home owning couple leaving the bulk of their estate to their children currently don!!!8217;t really have too much to worry about unless their joint assets exceed £1M.

pphillips

Can't really comment without further information about the value of your estate and your family circumstances. Lifetime trusts are expensive to set up but for the wealthy, they can be very valuable in terms of inheritance tax savings.

DreSaver

Thanks All,

Some good and pertinent advice -

Almost embarrassed to say but here goes - Net estate - £3.6M

Its 4.5k each (me and wife) we have 2 dependants (14 & 9)

HTH

Thanks!

[Deleted User]

4.5k each! Ouch. : )

Just to give you a comparison. We are in the middle of having two new wills done. Total cost about £600.

Now, we could have got this cheaper. We are using a 'posh' solicitor, but as they have always provided great service before we are will to pay a bit more for the service.