Elderly relative asking for advice

redux

Sorry, I was going to say something about trusts

But of course the first consideration is secure this person's future rather than give too much away too soon.

A couple of types that may be worth looking at are loan trust and discounted gift trust

My mother set up one of the latter, that will eventually benefit the grandchildren when she dies, but she carries on receiving a modest income from it, £3000 or £4000 a year I think. The transfer into this trust was a potentially exempt transfer for inheritance tax purposes, and she has survived more than 7 years since.

Loan trust I understand slightly less. My parents each set one up, via two Halifax salesmen, so imagine the performance was average rather than brilliant. And when it started I didn't see the point as inheritance tax liability seemed unlikely then. At some stage the plan inside the trusts matured and my mother decided to pay it out to me and siblings

I believe - it was true when I read it years ago anyway, but would need checking to see if still true - that someone making lifetime gifts can also make a gift of premiums for tapering life insurance that will cover inheritance tax if they do not survive the 7 years until the gift is exempt. 

Rollinghome

artyboy said:

Would appreciate some pointers on this one... situation is that I have an >75yo single relative that has amassed a near £1m pot of savings and investments. Add to that some property and their net worth is probably closer to £1.5m. They live a frugal lifestyle and show no signs of changing that, so the pension they get is 'enough' for them without ever dipping into their pot.

There seem to be assumptions in this thread that need to be reconsidered.

The most obvious being that a 75 year old would need your advice. It might be that all he wanted from you was an exchange of ideas, of one investor to another.  Not a questioning of his decisions.

I'm somewhat older than that, and while I always enjoy discussion, certainly wouldn't welcome unrequested advice, particularly if the advice was from someone whose qualification was unclear.  Nor would Trump or Biden who intend to run for a second term as POTUS.  Being a septuagenarian doesn't inevitably mean the loss of all financial competence.  Ask Warren Buffett.

He doesn't seem to have done too badly financially.  Have you done substantially better?

You should also consider that he may not be being entirely frank with you. Without wishing to be impolite, he may not wish to discuss his affairs with you in great detail.  He may have already willed all his assets to a worthy global charity or cat's home, IHT problem solved, and doesn't want to break it to you that you won't be getting a thing.

He may, I hope, also be savvy enough to know that "gifting" means just that, and that money will no longer will no longer be his to spend or control.  Money that he could decide to spend on a second home by the sea, a life-saving operation, ending his days at the Ritz rather than in a care home, or on a floozie who just makes him happy.  Good for him. Ensuring that his lucky relatives pay as little IHT as possible should not be his primary consideration.

There may be many other considerations that you might not understand until you are his age. Unless he is clearly mentally incompetent, then you should be willing to discuss matters where he wants your opinion, but always without trying to run his life.

Do that well without being patronising and he might leave you a few bob.

artyboy

Rollinghome said:

artyboy said:

Would appreciate some pointers on this one... situation is that I have an >75yo single relative that has amassed a near £1m pot of savings and investments. Add to that some property and their net worth is probably closer to £1.5m. They live a frugal lifestyle and show no signs of changing that, so the pension they get is 'enough' for them without ever dipping into their pot.

There seem to be assumptions in this thread that need to be reconsidered.

The most obvious being that a 75 year old would need your advice. It might be that all he wanted from you was an exchange of ideas, of one investor to another.  Not a questioning of his decisions.

I'm somewhat older than that, and while I always enjoy discussion, certainly wouldn't welcome unrequested advice, particularly if the advice was from someone whose qualification was unclear.  Nor would Trump or Biden who intend to run for a second term as POTUS.  Being a septuagenarian doesn't inevitably mean the loss of all financial competence.  Ask Warren Buffett.

He doesn't seem to have done too badly financially.  Have you done substantially better?

You should also consider that he may not be being entirely frank with you. Without wishing to be impolite, he may not wish to discuss his affairs with you in great detail.  He may have already willed all his assets to a worthy global charity or cat's home, IHT problem solved, and doesn't want to break it to you that you won't be getting a thing.

He may, I hope, also be savvy enough to know that "gifting" means just that, and that money will no longer will no longer be his to spend or control.  Money that he could decide to spend on a second home by the sea, a life-saving operation, ending his days at the Ritz rather than in a care home, or on a floozie who just makes him happy.  Good for him. Ensuring that his lucky relatives pay as little IHT as possible should not be his primary consideration.

There may be many other considerations that you might not understand until you are his age. Unless he is clearly mentally incompetent, then you should be willing to discuss matters where he wants your opinion, but always without trying to run his life.

Do that well without being patronising and he might leave you a few bob.

Um, no, no assumptions at all. This is a person that I have a good relationship with and have done for my entire life. They have in the past made occasional requests or questions for information, pointers and guidance, but in this case, specifically wanted to do an "open kimono" review of their position and was clearly asking for guidance. At no point was I intending to give "advice" and I was very clear on that point in my OP. So I'm not sure where you might have got the idea that I was in any way imposing my will in any sort of unsolicited way!

This individual knows that I am - at least within the context of my family - the one that knows a bit about financial matters, and so was after some help in getting some thoughts and a plan together. They also know that I've done very well in my own career, so I'm hardly going to be angling for anything to be gifted my way, something I was abundantly clear on from the start

Anyway, as I said it was a good discussion, with some suggestions to put into action and further discussions to come as and when appropriate.

Rollinghome

artyboy said:

Rollinghome said:

artyboy said:

Would appreciate some pointers on this one... situation is that I have an >75yo single relative that has amassed a near £1m pot of savings and investments. Add to that some property and their net worth is probably closer to £1.5m. They live a frugal lifestyle and show no signs of changing that, so the pension they get is 'enough' for them without ever dipping into their pot.

There seem to be assumptions in this thread that need to be reconsidered.

The most obvious being that a 75 year old would need your advice. It might be that all he wanted from you was an exchange of ideas, of one investor to another.  Not a questioning of his decisions.

I'm somewhat older than that, and while I always enjoy discussion, certainly wouldn't welcome unrequested advice, particularly if the advice was from someone whose qualification was unclear.  Nor would Trump or Biden who intend to run for a second term as POTUS.  Being a septuagenarian doesn't inevitably mean the loss of all financial competence.  Ask Warren Buffett.

He doesn't seem to have done too badly financially.  Have you done substantially better?

You should also consider that he may not be being entirely frank with you. Without wishing to be impolite, he may not wish to discuss his affairs with you in great detail.  He may have already willed all his assets to a worthy global charity or cat's home, IHT problem solved, and doesn't want to break it to you that you won't be getting a thing.

He may, I hope, also be savvy enough to know that "gifting" means just that, and that money will no longer will no longer be his to spend or control.  Money that he could decide to spend on a second home by the sea, a life-saving operation, ending his days at the Ritz rather than in a care home, or on a floozie who just makes him happy.  Good for him. Ensuring that his lucky relatives pay as little IHT as possible should not be his primary consideration.

There may be many other considerations that you might not understand until you are his age. Unless he is clearly mentally incompetent, then you should be willing to discuss matters where he wants your opinion, but always without trying to run his life.

Do that well without being patronising and he might leave you a few bob.

Um, no, no assumptions at all. This is a person that I have a good relationship with and have done for my entire life. They have in the past made occasional requests or questions for information, pointers and guidance, but in this case, specifically wanted to do an "open kimono" review of their position and was clearly asking for guidance. At no point was I intending to give "advice" and I was very clear on that point in my OP. So I'm not sure where you might have got the idea that I was in any way imposing my will in any sort of unsolicited way!

This individual knows that I am - at least within the context of my family - the one that knows a bit about financial matters, and so was after some help in getting some thoughts and a plan together. They also know that I've done very well in my own career, so I'm hardly going to be angling for anything to be gifted my way, something I was abundantly clear on from the start

Anyway, as I said it was a good discussion, with some suggestions to put into action and further discussions to come as and when appropriate.

In which case forget your Q1)

"1) Will - how do I persuade them that getting one is an important first step? My thought is that choosing executor(s) is the kicker here, because there are siblings that are not entirely up to the job but would nonetheless be able to apply for letters of administration if they wanted.

2) My suggestion that they go out and enjoy life by spending some/all of it will likely fall on deaf ears, so assuming they won't do so, are there at least ways to optimise/mitigate the inevitable IHT bill? Gifting (relatives or charities) obviously... "

If he doesn't want to make a will, or doesn't want to tell you that he has, I'd suggest you respect his position and leave it alone.

And possibly Q2 as well. Too many of the replies seemed to imply that reducing IHT should be a priority for him.  It isn't unless he chooses it to be.

artyboy

Rollinghome said:

artyboy said:

Rollinghome said:

artyboy said:

Would appreciate some pointers on this one... situation is that I have an >75yo single relative that has amassed a near £1m pot of savings and investments. Add to that some property and their net worth is probably closer to £1.5m. They live a frugal lifestyle and show no signs of changing that, so the pension they get is 'enough' for them without ever dipping into their pot.

There seem to be assumptions in this thread that need to be reconsidered.

The most obvious being that a 75 year old would need your advice. It might be that all he wanted from you was an exchange of ideas, of one investor to another.  Not a questioning of his decisions.

I'm somewhat older than that, and while I always enjoy discussion, certainly wouldn't welcome unrequested advice, particularly if the advice was from someone whose qualification was unclear.  Nor would Trump or Biden who intend to run for a second term as POTUS.  Being a septuagenarian doesn't inevitably mean the loss of all financial competence.  Ask Warren Buffett.

He doesn't seem to have done too badly financially.  Have you done substantially better?

You should also consider that he may not be being entirely frank with you. Without wishing to be impolite, he may not wish to discuss his affairs with you in great detail.  He may have already willed all his assets to a worthy global charity or cat's home, IHT problem solved, and doesn't want to break it to you that you won't be getting a thing.

He may, I hope, also be savvy enough to know that "gifting" means just that, and that money will no longer will no longer be his to spend or control.  Money that he could decide to spend on a second home by the sea, a life-saving operation, ending his days at the Ritz rather than in a care home, or on a floozie who just makes him happy.  Good for him. Ensuring that his lucky relatives pay as little IHT as possible should not be his primary consideration.

There may be many other considerations that you might not understand until you are his age. Unless he is clearly mentally incompetent, then you should be willing to discuss matters where he wants your opinion, but always without trying to run his life.

Do that well without being patronising and he might leave you a few bob.

Um, no, no assumptions at all. This is a person that I have a good relationship with and have done for my entire life. They have in the past made occasional requests or questions for information, pointers and guidance, but in this case, specifically wanted to do an "open kimono" review of their position and was clearly asking for guidance. At no point was I intending to give "advice" and I was very clear on that point in my OP. So I'm not sure where you might have got the idea that I was in any way imposing my will in any sort of unsolicited way!

This individual knows that I am - at least within the context of my family - the one that knows a bit about financial matters, and so was after some help in getting some thoughts and a plan together. They also know that I've done very well in my own career, so I'm hardly going to be angling for anything to be gifted my way, something I was abundantly clear on from the start

Anyway, as I said it was a good discussion, with some suggestions to put into action and further discussions to come as and when appropriate.

In which case forget your Q1)

"1) Will - how do I persuade them that getting one is an important first step? My thought is that choosing executor(s) is the kicker here, because there are siblings that are not entirely up to the job but would nonetheless be able to apply for letters of administration if they wanted.

2) My suggestion that they go out and enjoy life by spending some/all of it will likely fall on deaf ears, so assuming they won't do so, are there at least ways to optimise/mitigate the inevitable IHT bill? Gifting (relatives or charities) obviously... "

If he doesn't want to make a will, or doesn't want to tell you that he has, I'd suggest you respect his position and leave it alone.

And possibly Q2 as well. Too many of the replies seemed to imply that reducing IHT should be a priority for him.  It isn't unless he chooses it to be.

Well 1 was a non issue as they fully realised they needed a will and it was really just inertia that hadn't got it sorted before (in fact inertia was really the key theme here, they realised things were 'drifting' hence wanted ideas of how to simplify/restructure).

And 2 was very much working on their own position that they didn't want a load of their money eventually disappearing as IHT, and wanting to see if there were any options beyond spending and gifting. Because ultimately it's their choice - do something different when alive, or accept the government will take a big bite when they die...

bompey

I sympathise with your position. It is a very similar position to my in laws although they do at least have a will, but it is from the 1970s. The executors are the same generation as the in laws (I.e. also approaching 80) rather than their children who are now in their 50s and far more capable.
They are super frugal to the point of not giving Christmas and birthday gifts to any of their children and grandchildren despite having v good relationships with them, but will leave an eye watering IHT bill. There are many savings accounts with smallish pots all over the place and although they will chase savings rates they refuse to engage in any attempts to simplify their pots and reduce IHT. This will eventually fall to my wife to deal with.

Rollinghome

Your complaint seems to be that your wife's parents have plenty of money but aren't giving as much to you and your family as you feel entitled to. Even worse, when they pop their clogs, you again might not get as much of this large sum of money as you'd like.

To top it all, your wife might have to spend a few hours sorting out the probate because you'd rather not pay a solicitor. Have you made your grievances known to them, and if so, what did they say?

You do realise if the money is theirs, then it's for them to decide what to do with it. There may be a very good reason why they have not chosen you, your wife or her siblings to be executors.

You could resolve all your woes if you persuaded them to give the bulk of their money to a charity of their choice, who can typically take care of all the formalities, and just leave the amount below the IHT limit to their greedy off-spring.  No IHT to be paid and over-worked wife problem solved.  Of course, you might not get as much as you want or feel entitled to.

Alternatively, you could concentrate on offering a few suggestions on how to enjoy their money within their lifetime, perhaps including the pleasure of seeing their money used well by their favoured charities

artyboy

Rollinghome said:

Your complaint seems to be that your wife's parents have plenty of money but aren't giving as much to you and your family as you feel entitled to. Even worse, when they pop their clogs, you again might not get as much of this large sum of money as you'd like.

To top it all, your wife might have to spend a few hours sorting out the probate because you'd rather not pay a solicitor. Have you made your grievances known to them, and if so, what did they say?

You do realise if the money is theirs, then it's for them to decide what to do with it. There may be a very good reason why they have not chosen you, your wife or her siblings to be executors.

You could resolve all your woes if you persuaded them to give the bulk of their money to a charity of their choice, who can typically take care of all the formalities, and just leave the amount below the IHT limit to their greedy off-spring.  No IHT to be paid and over-worked wife problem solved.  Of course, you might not get as much as you want or feel entitled to.

Alternatively, you could concentrate on offering a few suggestions on how to enjoy their money within their lifetime, perhaps including the pleasure of seeing their money used well by their favoured charities

Okaaay. Well I've been extraordinarily patient with you but frankly I'm done. No idea if you are intentionally trolling me or you just have a bee in your bonnet because you don't have a sufficiently supportive family of your own, but either way I'm not going to further dignify this twaddle with a response.

Brie

Another thing to think about is a living will.  We did this with my mom having had a frank discussion between her and all us siblings.  How does she want her life to continue, what would she want if she was severely ill and in hospital having had a stroke etc, when her life ends what would she want as a way to celebrate her life etc etc etc.  Mom is very stubborn and flippant at times  with a "I'm going to live forever and if I do go I'm taking it all with me" kind of attitude so we knew we had to get some decent answers from her.  

Easy things to do too - getting third party authority on the bank accounts so that when it gets to the point that managing them is more awkward (can't get to the branch etc) then you/someone can assist.  Going joint on them might be a step too far but is another possibility.  In their "living will" document they can state that it remains their money for them to use and make decisions on but that they recognise assistance may be required at some future date.  Also a simple "letter of authority" which would allow you/someone to help liaise with their utility providers etc would be handy.  These things can be put in place at no expense and relatively quickly and easily compared to getting LPAs in place.

Marmaduke123

bompey said:

 It is a very similar position to my in laws although they do at least have a will, but it is from the 1970s. The executors are the same generation as the in laws (I.e. also approaching 80) rather than their children who are now in their 50s and far more capable.

Is your assessment of relative capability based on actual evidence, or merely on their ages? It's not a good idea to have executors of the same generation when you reach your 80s, for the obvious reason that they may pre decease you. However, I know many 80 year olds who are far more capable than lots of 50 year olds.