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We would all want our wealth to be a positive force in our families and will generally, at some point, like to consider sharing our good fortune with other family members, without creating problems!
This can be a very emotive subject, so how do you decide who gets what, and how much can you afford to gift to them?
If you have great aspirations for your wealth in retirement, with holidays, cars and home improvements, it may be difficult to see how much there is left to be able to give away. It is always worth conducting a strategic financial review with an expert.
The Strategic Financial Planning service offered by Taylor Patterson can help you sit down and take stock of your financial goals for your future years. It will consider your income and capital objectives to gain a clear idea of how much money you can pass on to family members, for example:
A family have built up wealth over many years by extracting monies from the family business and are considering whether there is a sufficient surplus of monies to enable wealth to be passed onto the children and grandchildren. The wealth is allocated as follows:
Cash on deposit – £400,000
Investment portfolio – £500,000
Pension funds – £500,000
Final salary pension – £13,000pa
The family are currently spending £40,000pa, want to make adjustments to their home of around £70,000 and be able to plan to spend an estimated £50,000pa in retirement, as they look to travel more.
Whilst the family have a good level of wealth, it is difficult for them to grasp whether there is current surplus money that could be passed on to the family, whilst still being able to achieve their own income and capital objectives. They are also concerned regarding inheritance tax and are unsure how to move forward to mitigate these issues.
By using the Taylor Patterson Strategic Financial Planning service, we were able to identify that having taken into account all of their assets, based on their chosen level of risk and inflation, they could afford to give away £325,000, should they wish, and still achieve their own goals of travelling and home improvements.
Having completed the Strategic Financial Plan, they decided to establish a Discretionary Trust with £100,000 for the benefit of the family, and may consider topping it up over the years.
Continuing changes to legislation would seem to be altering the ways in which individuals can legitimately pass on wealth to the next generation. Careful planning, with a financial adviser and a specialist solicitor, will ensure you are not only looking to maximise investment returns, but extending the reach of your legacy down the generations.
The comprehensive service offered by Taylor Patterson aims to deal with these questions and challenges by considering all of your assets and determining whether there is sufficient resources available to meet your goals.
We believe one of our key roles as advisers lies with helping clients understand, build and preserve their wealth.
For more information on the Strategic Financial Planning service, contact Jason Street on 01772 555073 or Jason.firstname.lastname@example.org.