Financial advisor - Scotland - inheritance issue

drspouse

I am an executor of my late mother's estate and she left a considerable portion of the estate to two young adult relatives (one just turned 20) who live in Scotland (Central Belt).

We executors are sure that these relatives should seek financial advice about the best way to deal with their inheritance but we have no good way to find one for them. I'm not convinced my Googling will help and other Scottish relatives are of the mind that "it's a nice problem to have but I've never needed one".

We needed a valuation too but chose a chartered surveyor. We aren't sure what the equivalent would be for financial advice, and we are talking two students who've never had to think about money before, not trust fund babies who have the family solicitor round for sherry!

RAS

In Scotland, if the beneficiaries are over 16 years old, they are usually entitled to inherit and to make their own mistakes, however awful the adults around them feel.

I'd have been reasonably sensible in that situation but based on their "schemes to get rich" I would expect my sibling or niblings to go through any inheritance like a dose of salts. Apart from one nibling who has their head screw on.

oldernonethewiser

You could suggest that they get financial advice but it would be up to them to sort that out for themselves, should they wish to do so.

drspouse

I should further clarify that they have asked for advice but probably don't know there's such a thing as a financial advisor; we shouldn't be giving them financial advice as we are the executors; and that their portion of the inheritance a) could include property and therefore they need to decide whether to sell or keep and b) is in trust till they are 25 but they are different ages so need to decide what to do when one of them turns 25 and the other hasn't.

ETA they do have their heads screwed on but have decisions to make at some point.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82156938#Comment_82156938

If as you say their inheritance is held in trust contingent on each attaining age 25, then it is not them that needs investment advice, but you as their trustees assuming you have been appointed in that capacity by the Will.

Trusts are a steep learning curve for those who have no experience in the matter, so isn't there a competent solicitor in the background who has explained to you the tax implications of this trust arrangement prior to the children's attaining age 25 ?

If not, I reccomend you seek advice from a STEP qualified solicitor ASAP to explain your trustee duties especially in the context of what appears to be a Scottish based trust.

STEP is The Society of Trust and Estate Practitioners, which is the specialist branch of the profession with considerably more training and experience in trust and probate matters than the average lawyer - link below -

https://www.step.org/branches/step-scotland

A STEP lawyer maybe able to effect an introduction to investment advisers with trust investment competency. Worth noting in this regard that during the currency of the trust, the decision making related to whether to keep the property, usually vests with the trustees not the beneficiares.

Finally note that trusts are required to register with HMRC per below -

https://www.gov.uk/guidance/check-if-you-need-to-register-a-trust

born_again

Even calling into their bank & saying they are getting a inheritance would get some advice, but may only be on their own products.

Better than nothing.

drspouse

@poseidon1 you are correct and we will get that too. But one will inherit soon (the rate probate is going possibly before it is granted), and we may vary the trust for the second to inherit at the same time.

@born_again The financial advice needs to be more comprehensive than "here's our high interest account". What they should do with the property, What's Capital Gains Tax and how does that affect them, what about stocks and shares. Etc. As another beneficiary of the will and as an executor I am not an independent body nor am I qualified to advise them. For my own share I have an idea of the decisions to be made but they do not.

born_again

To be fair you made no mention of property of stocks/shares.

https://www.unbiased.co.uk/advisers/financial-adviser/united-kingdom--scotland?searchId=52488731

SiliconChip

One option for finding an IFA or other advisor that is sometimes mentioned on here is the unbiased website: http://www.unbiased.co.uk

drspouse

https://forums.moneysavingexpert.com/discussion/comment/82157227#Comment_82157227

Sorry, I thought I had, but it seems I mentioned a surveyor and a valuation and neglected to join the dots. There probably aren't any directly inherited stocks and shares but I am not the best person to advise them on whether this is a good investment for them, specifically.

Thanks for the pointer. I'll pass it on to my relatives.

Technosaurus

Hi @drspouse

We had a similar issue recently but the other way round age-wise, in that my m-i-l suddenly and unexpectedly went from zero interest in financial matters (basically only needing to buy the Tesco shop each week) to inheriting a high six figure sum of various assets and suddenly having to consider CGT/IHT etc. Whilst she was never exactly going to 'waste' the money like a young'un might do, she still found it very overwhelming.

Her high street bank have a Wealth Management division which gave lots of good advice. As you say, they are a bit hamstrung in terms of what they can recommend - ie their own products - but rest assured it was definitely more than "here's our highest interest savings account", the chap came to the house and talked her through things for over two hours to agree a strategy that suited her. It is also 'actively managed' which although incurs higher than necessary (IMHO) fees means she doesn't have to worry about maxing ISA's every April/when to sell certain shares and the like.

I do have a friend who is an IFA who did also us the honour of a quick free chat. They offer similar services with a much wider range of products/lifestyle options for cheaper than the bank's fee, it's just a case of finding one they like and trust locally - recommendation probably the best method.

But the high street bank isn't a bad starting point if it's a considerable sum of money.