Comments on: Passing It On

By: drillo

drillo — Mon, 15 Feb 2021 17:34:38 +0000

I made the decision to take my tax free pension lump sum early and buy investment trusts in isa wrappers in the names of my children (age 18 onwards). This provides scope for funding further education/house deposits with tax free growth. Accounts are online and although they know I am using their allowances they do not know the value of investments etc. and have no knowledge of how to access them. They don’t seem to be interested either. This also has the benefit of reducing my risk of exceeding the pension lifetime limit. There is a lot of scope to transfer wealth in this way before they start to earn enough money to to fund isas themselves.

By: ITinvestor

ITinvestor — Wed, 10 Feb 2021 10:59:05 +0000

In reply to Tom. Good point Tom - definitely worth remembering that one.

By: Tom

Tom — Tue, 09 Feb 2021 16:58:16 +0000

Thanks again for some good reminders here, ITInvestor. One thing I would add from my own experience is to remember to make sure that any life insurance is written into trust, with your beneficiaries named. Therefore the payout, if you die during the term of the policy, falls outside your estate for the purposes of IHT. It can also then be paid, I believe, before probate has been granted which may help with other aspects of the estate at a time when money is tight. I took out life insurance and asked for it to be written into trust but the IFA totally forgot about it. This isn’t something that involves solicitors – you just need to get a simple form which the policy providers will send through. You have to name some executors, that’s it. Could save a lot of tax if your estate is liable to IHT, which these days is highly likely if you live in London.

By: ITinvestor

ITinvestor — Mon, 08 Feb 2021 09:39:39 +0000

In reply to Simon T.

Thanks for the clarification, Simon.

A little more info here for those interested: https://www.ii.co.uk/analysis-commentary/why-you-need-will-your-pension-ii512914

By: Simon T

Simon T — Mon, 08 Feb 2021 09:20:39 +0000

One small thing, pensions are not in wills but in the Nomination of Beneficiaries with the Pension/SIPP provider.
What you might want to do in the Will, say with children, is that they catered for by the Nomination of Beneficiaries.
Extremely more tax efficient if you die before 75

By: ITinvestor

ITinvestor — Sun, 24 Jan 2021 18:43:59 +0000

In reply to Bearcatbear.

@Bearcatbear – haven’t listened to that podcast in a while so will check that one out. Thanks for the heads up. It was a few years ago that I came across this idea (still can’t remember where though!)

@JJ – Interesting. Not heard any first-hand stories myself but I know some people are very wary of them for this reason.

@Andrew59 – Glad you found the list useful!

By: Andrew59

Andrew59 — Sat, 23 Jan 2021 18:00:44 +0000

Really good article in my view. Made me think.
1. Annuities v drawdown – done. Drawdown.
2. Wills – done and reviewed in December as originals kept with solicitor who has been taken over. They confirmed these are now held at the head office of the new company in Birmingham. Quite a surprise as I live 100 miles away!
3. Inheritance tax – don’t think it affects me but will review. Need to check my parents situation.
4. Lasting Power of Attorney – not done that yet. Currently finishing off my father’s two, having done my mother’s 3 months ago.
5. Protecting our income – done. Checked because of this article. Decent defined benefit pension which wife gets 60% of if I die. No life insurance. Looking at outgoings verses income now and taking into account inflation, and the fact she will get a decent state pension, we feel she’ll be ok.
6.The Where to Find it List – to update
7. Investing for the kids – done. (Well got her through private education and a fair amount of university).
8. Passing on Investing Ideas – done, wil continue to do. Well she’s not interested in money in the slightest and is not demanding in any way, BUT that’s currently. She’s 25, single, no house or real commitments. I’ve sat down with her over the last 2 months and taken her through the basics and a bit more. She’s now drip feeding money into a world tracker in a LISA. Yippee! I consider this to be my greatest financial achievement. (Pat on the back to self). If she doesn’t buy a house and continues to invest, she’s got an assured retirement – well as certain as one can be.

By: Observer

Observer — Fri, 22 Jan 2021 14:23:29 +0000

I have a few friends (in their 60’s) who died without having their affairs in order and this caused ALOT of problem to their love ones.
Since then I have put all my details on a memory stick hidden in a safe place in a location known to my main beneficiaries. I have copies of all relevant documents etc. So I am in a far better place than my friends but it has downsides.
1. You have to keep it up to date as things change. (Although just storing say broker details rather than all your stocks avoids some of that.)
2. If my house burns down I assume the memory stick is lost.
3. If I die at the same time as my main beneficiaries and the minor ones are then in a pickle since they do not know of it existence/location.

It would be helpful if there was a 100% secure and safe location are on the internet that information was encrypted and the key released as per instructions in a Will. Being on-line make it easier to update and avoids the destruction issue. Alas I have not come across such a service.

By: Nick

Nick — Thu, 21 Jan 2021 12:47:29 +0000

I would highly recommend setting up POAs. We all think it will never happen to us but apparently 10% of people aged 65 and over suffer from dementia and it seems to be a lottery. Both my parents had this, and it just creeps up on people over an extended period without them noticing that they are no longer functioning. When my father died he had dozens of accounts with banks and brokers and some properties and even with a POA it was a very long and complicated job to sort out the estate. As you say there are few tax advantages these days to trusts but I have a simple arrangement in my own will so that my son will only receive his inheritance at age 25 and the trustees are a couple of old friends who unlike anyone in my family understand investments.