Estate Planning - Essex based recommendations wanted

Tiglet2

I'm hoping the very knowledgeable posters on MSE could recommend any Essex based Estate Planning Experts.  My in-laws are getting their affairs in order and are keen to spend a few hundred pounds getting proper advice.  I'm not sure whether it would be best to speak to a Financial Advisor or a Private Client Solicitor, but if anyone has used or had experience of trying to sort out their estate I'd be very grateful.

Keep_pedalling

It is against forum rules to give such recommendations and anyway it would be wise to treat any recommendations from strangers on line with great caution.

What sort of net worth are we talking about here, and how much of that is taken up by their home?

Nearlyold

Do your parents have any particular concerns with regard to estate planning?  What do they want to achieve? Or is it the case that they don't know what they want. A little more information on their circumstances might also help other more knowledgeable posters point your parents in the appropriate direction.

Tiglet2

Net worth is probably in the region of £1.5m, with the house being valued at around £900k.

Parents are early 80s in reasonable health at the moment. 

Parents don't know what they want, other than wanting to protect each other, then their son and daughter, as much as possible.  I believe they own their property as joint tenants with mirror wills leaving everything to each other.  What happens after that is not so clear.

They are trying to maximise what they are able to pass on to their two children, not to avoid paying tax/care home fees of course, but without tax/financial knowledge, it is difficult to know how best to set out Wills, such as a life interest, whether to hold the house as joint tenants or tenants in common, what happens following the first death etc.

Keep_pedalling

Tiglet2 said:

Net worth is probably in the region of £1.5m, with the house being valued at around £900k.

Parents are early 80s in reasonable health at the moment. 

Parents don't know what they want, other than wanting to protect each other, then their son and daughter, as much as possible.  I believe they own their property as joint tenants with mirror wills leaving everything to each other.  What happens after that is not so clear.

They are trying to maximise what they are able to pass on to their two children, not to avoid paying tax/care home fees of course, but without tax/financial knowledge, it is difficult to know how best to set out Wills, such as a life interest, whether to hold the house as joint tenants or tenants in common, what happens following the first death etc.

Your parents are in a great position and I don’t think they should be too concerned about IHT. Although a bit younger we are in a similar position. We have made significant gifts in the past and continue to make annual gifts to use up our annual exemptions. Although our estate would have to pay IHT if we were knocked over by a bus tomorrow we are not really bothered by that. Like us your parents can leave £1M tax free and they will get 60% of anything over that, so other are not being hard done by.

We have factored in the fact that we may have to spent some of our savings for support and care in our latter years but we want to avoid residential care if at all possible and having significant liquid assets will enable us to pay for support in our own home whether that support is have someone to cover domestic help and looking after the garden all the way up to live in carers. Have more than enough money to do that is more important to us than reducing the potential IHT liability.

We have not split the tenancy on the house or included life tenancies trusts in our wills, the main purpose of doing that is  to protect your children’s  legacy in the event the surviving spouse remarrying or you already have children from different partners, so it may not be appropriate for you parents to complicate things by doing that either.

If you parents left the wills as they are the surviving spouse would inherit everything tax free because of the spousal exemption. Because everything goes to the spouse none of the NRBs would be used and can be transferred to the survivor’s estate.

Do your parents have lasting powers of attorney in place? If not getting those done should be a priority especially for finance.

Keep_pedalling

With £600k in liquid assets it would be worth them making some one off gifts to their children / grand children. This will reduce the amount of IHT providing they live 7 years after making those gifts. They also make use of their annual £3000 exemption and, if their current income exceeds their annual expenditure they can also make exempt gifts from excess income.

Lifetime gifting makes sense for IHT planning, but I think more importantly, you get to see your money put to good use something you can’t do when you are dead.

bobster2

Tiglet2 said:

Net worth is probably in the region of £1.5m, with the house being valued at around £900k.

Parents are early 80s in reasonable health at the moment. 

Parents don't know what they want, other than wanting to protect each other, then their son and daughter, as much as possible.  I believe they own their property as joint tenants with mirror wills leaving everything to each other.  What happens after that is not so clear.

They are trying to maximise what they are able to pass on to their two children, not to avoid paying tax/care home fees of course, but without tax/financial knowledge, it is difficult to know how best to set out Wills, such as a life interest, whether to hold the house as joint tenants or tenants in common, what happens following the first death etc.

In simple terms - if they have mirror wills leaving everything to the surviving spouse, and then on the second death everything to their children - they'd probably leave about £1.3m to the children. i.e an IHT bill of £200k.

So the children would be very well provided for. 

Tiglet2

Thank you for the helpful information.

Power of Attorney for Finance and Health just been set up, which prompted a look at sorting out other admin matters.