When to involve a financial adviser in your estate plan Understanding when to engage a financial adviser in your estate planning process can make a significant difference in ensuring the protection, preservation, and appropriate transfer of wealth across generations. Done effectively, estate planning provides not only peace of mind but also clarity and direction for your loved ones during what may be a challenging time. Estate planning involves both legal and financial considerations, and a financial adviser can play a crucial role in ensuring the plan is efficient, tax optimised, and aligned with your long-term financial goals. While many people assume that estate planning is something reserved for later in life or only for the wealthy, the truth is that it’s a critical process for anyone with assets or dependants. The earlier you start planning, the more flexibility and control you retain over how your estate is distributed. Moreover, involving the right professionals early in the process can help avoid costly mistakes or unintended consequences. Let’s delve into the key moments when bringing a financial adviser into your estate planning process is not only helpful but possibly essential. Assessing your financial health and goals One of the earliest signals that it’s time to consider expert guidance is when you begin assessing your overall financial health and future objectives. A comprehensive estate plan is not simply a will or a list of beneficiaries; it’s a reflection of your financial life, your intentions for your wealth, and your relationships. A financial adviser plays an important role in evaluating your assets, including savings, investments, pensions, property, and business interests. They can help you identify any gaps in your financial arrangements and offer strategic advice on growing and preserving your wealth while keeping your estate plan goals in mind. If you’ve begun thinking about leaving a legacy, whether to family, friends, or charitable causes, or if your goals include minimising your estate’s tax liability, you should seriously consider involving a financial adviser at this early stage. Creating a legacy plan that reflects both your wishes and the practicalities of your financial position requires nuanced and technical consideration, which a financial professional is well-equipped to offer. Life events that trigger estate planning needs Major life events often prompt individuals to think seriously about their estate. These transitions often bring with them new responsibilities, revised financial priorities, and legal considerations. Each provides a natural and crucial opportunity to work with a financial adviser to ensure your estate plan remains relevant and effective. Marriage or civil partnership is one such moment. Combining finances, establishing mutual goals, and planning for dependants are all good reasons to revisit your existing arrangements. Similarly, the birth or adoption of a child introduces new priorities for providing security and considering guardianship. A financial adviser can help estimate future education and living costs and suggest investments or trusts that can support these goals. Divorce or separation is another key life event that impacts estate planning. Changes in marital status frequently alter your asset ownership, designated beneficiaries, and long-term financial arrangements. Your financial adviser will be able to guide you through revising your estate plan to reflect your new circumstances, ensuring that your assets are still directed per your updated wishes. The death of a spouse or other key beneficiary also warrants a full review of your estate plan. Survivor benefits, ownership of property, pensions, and tax implications must all be considered. A financial adviser can work closely with your legal team to help manage this complex process during an emotionally difficult time. Receiving an inheritance or acquiring significant new wealth similarly merits financial advice. Capital gains, income distribution, taxation, and investment decisions will all affect how this wealth is used or preserved. A financial adviser will ensure these new assets are integrated into your overall estate plan in a way that aligns with your future intentions. In all these cases, timely advice helps prevent missed opportunities and ensures your estate plan reflects your current values and situation. Transitions in your career and business interests Professional growth, a career change, or establishing a business are also valuable times to revisit your estate planning arrangements with a financial adviser. As your earning potential increases or diversifies, it’s vital to ensure that your estate plan keeps pace with your new financial reality. Many professionals and business owners accumulate assets quickly and may face unique succession and tax considerations. If you own a business, ensuring its smooth transition—whether to a family member, partner, or third party—is crucial. Planning ahead with a financial adviser can help shape business succession models, evaluate liquidity risks, and develop strategies for equitable distribution among heirs. Retirement is another significant point where holistic review becomes necessary. As you begin drawing on pensions, downsizing assets, or adjusting your investment risk profile, it’s important that these changes are seamlessly tied into your estate plan. A financial adviser with expertise in retirement planning can help optimise pension withdrawals, tax allowances, and ensure that savings drawdown does not adversely affect your long-term estate structure. Planning for inheritance tax efficiently Inheritance tax (IHT) planning is an area where financial advisers can make a particularly meaningful contribution. In the UK, estates valued over the nil-rate band—currently £325,000 per individual—are subject to inheritance tax at a rate of 40%. With property values and savings often exceeding this threshold, even relatively modest estates may incur significant tax liabilities. Financial advisers are well-versed in the intricacies of IHT legislation and can implement various legal strategies to manage liability more efficiently. Examples include making use of lifetime gifts, setting up trusts, investing in business property relief-qualifying assets, and leveraging allowances and exemptions such as the residence nil-rate band. Much of successful IHT planning is about timing. The seven-year rule for potentially exempt transfers, for instance, highlights how planning should occur years in advance of potential disposition. Working with a financial adviser means you’re not only guided on which tools or mechanisms to use, but also when and how to use them in

Inheritance planning with family investment companies Understanding how to manage and pass on wealth efficiently is a crucial aspect of financial planning. For high-net-worth individuals and families, traditional vehicles such as wills and trusts have long been cornerstones of succession strategy. However, in recent years, a more flexible and potentially tax-efficient structure has gained prominence: the Family Investment Company, often abbreviated as FIC. This approach combines the benefits of company ownership with the long-term vision of family wealth preservation. Family Investment Companies are proving to be especially popular among families with substantial assets who want to manage wealth across generations whilst maintaining some degree of control. This article delves deep into the setup, operation, and advantages of using this structure as part of a robust inheritance planning strategy. What Is a Family Investment Company? A Family Investment Company is a bespoke private limited company, typically structured to make and hold investments rather than trade. Unlike traditional trading companies, an FIC is established primarily for the purpose of investing in asset classes such as securities, property, or other long-term holdings. The shareholders in an FIC are usually family members, and the company is used as a mechanism to support multi-generational planning. Control can be retained by the founders (often the parents or grandparents) while allowing younger generations to participate in and benefit from asset growth. The division of share classes and voting rights is central to the strategy and flexibility of this setup. Setting Up the Structure Creating an FIC involves several steps, each requiring attention to detail and customised decision-making. Once the family’s financial goals are clearly identified, the company is incorporated with Companies House. The key decisions revolve around shareholding arrangements, capital investment, and governance structures. One common model is to have parents set up the FIC and contribute funds as a loan or equity. They may hold voting shares (with control over decisions) while issuing growth shares to children and grandchildren. This allows the future gains in investments to accrue to the younger generation, helping reduce the value of the founder’s estate for Inheritance Tax (IHT) purposes. The initial funds may come from taxed income or capital held personally, and often, a series of legal and tax documents are drafted to formalise the loan terms, rights of shareholders, and duties of directors. Crucially, the distinction between ownership and control can be designed to preserve the founders’ influence over investment decisions while enabling the next generation to share in the upside. Legal advice is essential at this stage to ensure control rights, share classes, and future contributions are correctly structured. Why Use this Strategy for Intergenerational Wealth Planning? One of the primary motivations for establishing a Family Investment Company is estate and succession planning. Within the UK tax regime, family wealth passed on at death can be liable for 40% IHT on amounts above the nil-rate band and other relief thresholds. An FIC offers several potential ways to mitigate the impact of these rules. By gifting growth shares in the company to children or younger family members, either outright or via trusts, founders can pass on the future appreciation of assets in a tax-efficient manner while retaining voting rights. The value of the shares given away is potentially covered by the seven-year rule for Gifts of Potentially Exempt Transfers (PETs). Hence, if the donor survives for seven years after the gift, the value escapes IHT. Another advantage is the ability to implement a tailored dividend policy. Dividends can be paid to different share classes to provide income to the respective holders in a tax-efficient way, making use of lower marginal tax rates available to younger or non-earning family members. The structure also allows for centralised control of investments, coordinated family strategies, and a professionalised management set-up, which can be beneficial over the long term. Tax Considerations and Efficiency While the FIC structure offers inheritance planning benefits, it is also attractive because of its potential tax efficiency during the founder’s life. Corporation tax rates are currently lower than higher rate income tax for individuals, especially for investment income and capital gains. Investment returns earned inside the company are subject to corporation tax – now standing at 25% for profits above £250,000. This is generally more favourable than higher and additional rate personal income tax, which can reach up to 45%. Moreover, there is no National Insurance payable on company profits, and there is often no immediate tax cost in gifting shares (subject to careful planning under the anti-avoidance rules). It’s also possible for the company to reinvest profits – after paying corporation tax – without drawing out funds personally. This allows assets to compound more effectively inside the FIC. Over decades, this can produce significantly higher wealth accumulation compared with taxed personal investments. However, it’s also important to recognise that FICs are increasingly under scrutiny by HMRC. While there is currently no general anti-avoidance rule targeted specifically at FICs, they do form part of HMRC’s broader investigations into wealth transfer mechanisms. Ensuring that the structure is truly for investment and inheritance purposes, and not just tax avoidance, is crucial. Robust legal, tax, and commercial documentation is essential. Maintaining Control with Share Structures One of the key benefits of a Family Investment Company is the flexibility around share structures. This enables founders to create different classes of shares for various family members, allowing them to fine-tune control, income distribution, and growth participation. Typically, shares can have differing rights relating to capital, income (dividends), and voting. For instance, parents may hold ‘A’ shares with full voting rights but limited entitlement to capital growth, while children may be assigned ‘B’ shares with no voting rights but rights to future capital appreciation and dividends. More complex structures can involve alphabet shares for each individual, giving precise control over who receives what and when. This structure not only allows founders to direct the company according to their preferences but also helps prevent sudden wealth transfer to younger generations, especially if they are not yet

Preparing your will when you have estranged family members Creating a will is a crucial element of estate planning, allowing individuals to exercise control over the distribution of their assets upon death. It offers the opportunity to ensure that cherished possessions go to the right beneficiaries, dependants are taken care of, and personal wishes are respected. However, the process becomes notably more complex when one has estranged family members. Estrangement can arise from a range of factors—family conflicts, lifestyle differences, geographical separation, or long-standing disputes. Deciding whether and how to include or exclude estranged relatives in a will requires thoughtful legal and emotional consideration. By handling these issues sensitively and strategically, it is possible to prevent future legal challenges and family confusion, while respecting deeply personal preferences. Evaluating Your Current Family Dynamics Before drafting or updating a will, it is essential to assess your familial relationships realistically. This involves reflecting on which relationships remain meaningful, which have deteriorated beyond repair, and who might have expectations—whether grounded or not—of inheritance. Many individuals face difficulties in evaluating estranged relationships objectively, as emotions and history often cloud judgment. However, it is necessary to set aside emotional responses and think critically about the consequences of including or excluding certain individuals from your estate. Consider the following:– Has the relationship been irreparably broken?– Have any reconciliation attempts been made or are they still ongoing?– Does the individual rely on you financially or emotionally?– Could their exclusion result in legal complications or emotional conflict among other beneficiaries? Documenting your thought process during this introspective stage can prove valuable in justifying your decisions later on, especially if disputes arise. Legal Considerations and Potential Claims In the UK, the principle of testamentary freedom allows individuals to distribute their estate as they wish. However, this freedom is not absolute. The Inheritance (Provision for Family and Dependants) Act 1975 enables certain categories of people—such as spouses, children, and financial dependants—to make a claim against an estate if they feel they have not been adequately provided for. Estranged adult children are a common source of such claims. While estrangement does not automatically disqualify a person from making a claim, courts will weigh various factors including the nature of the estrangement, the moral obligation of the deceased, and the claimant’s financial circumstances. For example, the notable case of Ilott v The Blue Cross highlighted the courts’ willingness to award inheritance to an estranged adult child, despite the clear intentions stated in the deceased’s will. These precedents demonstrate that simply writing someone out of a will can be contested, especially if insufficient reasons are recorded or if the documentation lacks clarity. To protect your will from potential challenges, certain legal strategies should be employed. These include meticulous documentation of your reasoning, ensuring financial dependence is addressed, and engaging legal professionals who can draft clear, robust provisions. Communicating Your Intentions with Sensitivity Although not legally required, it is often advisable to communicate one’s intentions regarding the will, potentially including the rationale for excluding or limiting provision for estranged family members. Open discussions, where possible, can mitigate surprise and resentment that might otherwise fuel litigation posthumously. Of course, such conversations aren’t always possible, especially where relations are antagonistic or painful. In such circumstances, a written expression of wishes, also known as a ‘Letter of Wishes’, can serve as a private yet powerful tool for explaining the reasoning behind specific decisions in the will. While not legally binding, it can provide context to executors and judges, assisting them in understanding your motives and intent. The language in such letters should be respectful, factual, and non-inflammatory. Avoiding blameful or accusatory terms prevents further escalating family tensions and instead positions your decision as thoughtful, balanced, and considered. Appointing Trusted Executors Choosing the right executors becomes even more vital when estrangement is involved. Executors are responsible for administering your estate in accordance with your will, and their judgment and neutrality can influence the overall process positively or negatively. When estranged family members are involved, it is generally unwise to appoint people who might have a vested interest in the estate outcome, especially if relationships are strained. Opt instead for trusted professionals such as a solicitor, a financially literate friend with no stake in the estate, or a corporate executor. Appointing impartial executors ensures that the administration of your estate is handled competently and fairly, reducing the emotional volatility that could arise from contested relationships. Exploring Alternative Provision If you suspect that omitting an estranged family member completely from your will could trigger conflict or court action, you might consider offering a nominal provision or a conditional bequest. This shows that the person was not forgotten or overlooked but that a deliberate and conscious choice was made. Such gestures can sometimes dissuade claims by displaying a reasoned consideration. For instance, a small, fixed monetary gift accompanied by an explanation in your Letter of Wishes may suffice. On the other hand, offering conditional gifts—for example, inheritance contingent upon drug rehabilitation or familial reconciliation—can be controversial and may not always be enforceable. These clauses must be carefully drafted by legal professionals to avoid rendering the bequests void. Alternatively, if full disinheritance is necessary, you could explore making donations to charities or causes that reflect your personal values and passions. In this way, your legacy supports ideals you cherished during your lifetime and can act as a statement of your priorities and beliefs. Anticipating and Preventing Disputes Disputes over wills are increasing in the UK, driven by complex family structures, growing wealth, and misunderstood expectations. Planning ahead to minimise these risks is essential, especially where estranged family members feel slighted or treated unfairly. To reduce the likelihood of a will being contested:– Use a qualified solicitor to draft your will. DIY wills are more prone to being challenged and can invite costly disputes due to vague language or omitted information.– Have a detailed Letter of Wishes that supports your decisions and reflects your intent in rational and moderate language.– Ask your solicitor

How to account for second homes in estate planning Owning a second home is a significant achievement and, for many, a rewarding culmination of years of hard work and financial growth. Whether it’s a countryside retreat, a seaside cottage, or an urban apartment, a second property often carries both financial and emotional value. Though these properties bring pleasure during one’s lifetime, they can also add complexity when it comes to planning the transfer of wealth after death. Properly addressing these assets is essential to ensure the efficient and equitable distribution of an estate, minimise potential tax burdens, and mitigate possible disputes among beneficiaries. Developing a comprehensive plan for handling additional properties demands foresight, legal awareness, and family communication. It involves careful consideration of inheritance laws, tax implications, ownership structures, and long-term intentions for the property. When integrated thoughtfully, the process can protect both the property’s legacy and the harmony of the family. Clarifying Ownership Structures How a second home is owned fundamentally influences how it is treated in estate planning. In the UK, properties may be owned individually, jointly, or under more complex arrangements such as property trusts or company structures. Each ownership model comes with benefits and responsibilities that directly impact the path of inheritance. If the property is held in a sole name, it becomes part of the owner’s estate on death and is distributed according to their will or the rules of intestacy if no will exists. In such cases, ensuring a valid and up-to-date will is crucial to avoid ambiguity and ensure that the property passes in accordance with the owner’s wishes. Joint ownership has its nuances. When a property is owned as joint tenants, the surviving owner automatically inherits the deceased’s share regardless of a will. However, if the owners hold it as tenants in common, each party’s share passes according to their will or intestacy rules. Knowing the differences between these forms can prevent unintended consequences and ensure a coordinated approach to succession. Some individuals choose to own a second home through a limited company or include it within a trust. While these paths offer potential tax planning benefits and asset protection features, especially for high-value estates, they also require specialised legal and financial advice due to their complexity. Addressing Usage and Emotional Attachment Second homes often have sentimental value beyond their market worth. For many families, such a property is a treasured gathering place infused with memories. Distributing these emotionally charged assets can create tension among heirs, particularly when multiple beneficiaries are involved with differing expectations. It is crucial to navigate not only financial considerations but also family dynamics. If one child, for instance, has become the de facto caretaker of the holiday home while others have shown less interest, unequal inheritances might reflect those relationships — but may also cause friction. Transparent conversations held well in advance can help clarify intentions and encourage open dialogue. In some cases, formal agreements among heirs post-inheritance can prescribe guidelines for shared use, maintenance responsibilities, and long-term plans. Sometimes, selling the property and distributing the proceeds equally may appear the fairest route. In other cases, allowing one heir to retain the property in exchange for a reduced share of other assets may be more fitting. What matters is that intentions are stated clearly through legal instruments, and family members are given the opportunity to understand the rationale behind the decisions. Weighing Tax Implications and Reliefs Inheritance tax (IHT) is a central concern in any form of estate planning, particularly when it involves residential property. In the UK, an estate is currently taxed at 40% on assets above the nil-rate band, which stands at £325,000 per individual. For married couples and civil partners, unused allowances can be transferred, potentially doubling the threshold before IHT applies. An additional property can significantly elevate the value of an estate above these thresholds. While the ‘residence nil-rate band’ offers some relief, this is designed primarily around passing the main residence to direct descendants and is not typically applicable to additional homes unless it has served as a primary residence at some point. To mitigate exposure to inheritance tax, individuals often explore strategies such as lifetime gifting, placing the property in trust, or selling the asset to extract and distribute value before death. However, these tactics are not without implications. Gifting property outright may trigger capital gains tax (CGT) if the property has appreciated, and the donor must survive for seven years post-gift for the property to be fully outside their estate for IHT purposes. Using trusts can shelter the asset from immediate IHT, but they come with their own reporting obligations, periodic tax charges, and administration costs. Therefore, sound legal and tax advice is essential. Understanding how these strategies interplay with capital gains tax, stamp duty land tax (SDLT), and IHT is vital to choosing the most suitable route. Planning Through Trusts and Wills Central to any estate plan involving real estate is the creation of a clear and legally robust will. The will should articulate who inherits each asset, under what conditions, and with what expectations. For second homes, where emotions and logistics are tangled, clarity prevents conflicts. Some testators opt for the use of property trusts within the will itself. A life interest trust, for instance, may leave property to a spouse or partner for use during their lifetime, with ownership passing to children or others upon their death. This approach is frequently seen in second marriages where testators wish to protect both current spouses and children of previous relationships. Discretionary trusts offer even more flexibility, allowing trustees to determine when and how beneficiaries access the property or proceeds from its use or sale. While these provide adaptability, they also place significant responsibility on trustees, who must act in the best interests of all beneficiaries. Another structural approach is to establish a separate trust entirely for the second home during one’s lifetime – particularly if the property is of high value or poses complex usage scenarios involving multiple

Estate planning when you’re part of a cohabiting couple Estate planning is a crucial aspect of financial and personal well-being, yet it’s often overlooked, particularly by those in non-traditional relationships. For cohabiting couples—individuals in committed, long-term partnerships who choose not to marry or enter into a civil partnership—the importance of clear, concise estate planning cannot be overstated. While these relationships often mirror the dynamics of formally recognised unions, the legal protections afforded to married couples or civil partners do not automatically extend to cohabitants in the UK. This lack of automatic legal recognition can lead to unintended consequences, especially when one partner dies or loses mental capacity. Therefore, it is essential for cohabiting partners to be proactive in setting up tailored estate plans that ensure their wishes are respected, their loved ones protected, and their affairs in order. Legal Landscape for Unmarried Couples in the UK One of the first challenges that cohabiting couples face is the widely held misconception that “common-law marriage” carries legal weight. Despite popular belief, the UK does not recognise common-law marriage, regardless of the duration of the relationship or whether the couple has children together. This means that, absent specific legal arrangements, cohabiting partners do not have the right to inherit their partner’s estate if they die without a will. Under the rules of intestacy in England and Wales, if someone dies without a will, their estate goes to their closest living relatives according to a strict hierarchy. For unmarried partners, this can mean being entirely excluded. In Scotland and Northern Ireland, the rules vary slightly but still generally offer minimal protection for cohabiting partners. Moreover, the absence of formal status affects a partner’s ability to make medical or financial decisions on behalf of their significant other in times of incapacity. It also complicates issues such as property ownership, pension benefits, and inheritance tax. The Importance of Writing a Will A will is the cornerstone of any estate plan and is particularly vital for unmarried couples. Without a valid will, a surviving partner could easily be left with nothing, even if the couple had been together for decades. When drafting a will, cohabiting couples should consider several elements: naming each other as beneficiaries, appointing executors, and specifying substitute beneficiaries in case of simultaneous death. It’s also possible to include personal items of sentimental or financial value, such as jewellery, art, or even digital assets. For couples with children, it’s crucial to name guardians and consider providing financial support through trusts or lump-sum inheritances. Proper estate planning can help prevent disputes among family members, ensure the welfare of any dependants, and guarantee that assets are distributed in accordance with the couple’s true intentions. Owning Property Jointly or Separately When it comes to property, the form of ownership can significantly influence inheritance outcomes. Cohabiting couples may own property either as joint tenants or tenants in common. As joint tenants, each party owns the entire property jointly, and upon the death of one partner, their share automatically passes to the surviving partner irrespective of any provisions in a will. While this route provides a simple and immediate transfer of ownership, it offers less flexibility in distributing the estate to other heirs, such as children from a previous relationship. Tenancy in common allows each partner to own a specified share of the property. This arrangement permits individuals to pass on their share of the home according to the instructions in their will, offering greater control but associated with more complex administration during the probate process. Reviewing the current title deed and understanding the implications of how a property is owned are critical steps in an estate plan. Coupling this with associated legal agreements, such as a cohabitation agreement, can help avoid disputes in the future. Creating a Cohabitation Agreement While often overshadowed by more well-known legal documents like wills and powers of attorney, a cohabitation agreement is a powerful tool for unmarried couples. It outlines the financial responsibilities and expectations of each partner during the relationship and sets the terms for the division of assets in the event of separation or death. This agreement can cover a wide range of topics: ownership shares in property, contributions to household expenses, ownership of personal assets, and arrangements for children. For estate planning purposes, it works hand in hand with other legal instruments to shore up the couple’s intentions and minimise potential legal challenges later on. Although not mandatory, seeking legal advice when drafting a cohabitation agreement is highly advisable. A well-drafted agreement serves not only as an estate planning tool but also as a mechanism for clarity and fairness throughout the course of the relationship. Powers of Attorney: Planning for Incapacity In addition to planning for death, cohabiting couples must consider the possibility of one partner becoming incapacitated due to illness or accident. In such circumstances, a Lasting Power of Attorney (LPA) allows a designated person to make decisions on their partner’s behalf. There are two types of LPA to consider: one for health and welfare, and one for property and financial affairs. Without an LPA in place, an unmarried partner has no automatic right to make decisions regarding medical treatment or to access financial accounts, regardless of how long they have been together. Registering an LPA is a relatively straightforward process but requires forward planning. It is essential to complete and register these documents with the Office of the Public Guardian while both parties have the mental capacity to do so. Pension and Death Benefits: Nominating a Partner Pensions can represent a significant portion of individual wealth, and the way they are structured can heavily influence inheritance outcomes. Unlike other assets, pension pots are typically not governed by the will, meaning it’s vital to file nomination forms with the pension provider to specify who should receive any lump-sum death benefits. Unmarried partners are typically not automatic beneficiaries, so the lack of a nomination form can create complications or lead to funds being paid to a default recipient, such as

Distributing cryptocurrency and NFTs in your UK will In today’s increasingly digital world, more individuals are incorporating cryptocurrencies and non-fungible tokens (NFTs) into their investment portfolios. These digital assets can carry significant value, yet when it comes to estate planning, they are often overlooked or misunderstood. Failure to properly account for digital assets like Bitcoin, Ethereum, or NFTs in your will could result in loved ones struggling to access them—or worse, losing them entirely. In the United Kingdom, it is both legally possible and wise to include these digital assets in your will or broader estate plan, ensuring a smooth and secure transfer of your holdings upon your death. Digital assets, by their nature, differ markedly from traditional investments. There are no account numbers in the usual sense, no financial institutions to act on your heirs’ behalf, and no straightforward recovery options. The decentralised architecture of these assets provides both opportunities and challenges for inheritance planning. To effectively pass them on, careful documentation and legal strategy are required. Defining Cryptocurrencies and NFTs in the Context of Estate Planning Cryptocurrencies are decentralised digital currencies that use cryptography for security. They operate on blockchain technology and are stored in digital wallets, which in turn are secured by private keys. Without access to these private keys, ownership of the cryptocurrency cannot be transferred or reclaimed. NFTs, on the other hand, are unique digital tokens that represent ownership of digital or real-world items—such as digital art, music, or even virtual real estate. NFTs are also stored on blockchains and managed through digital wallets. From a legal standpoint in the UK, digital assets like cryptocurrencies and NFTs are considered property. This classification, affirmed by several UK court decisions and guidelines from the Law Commission, allows for these assets to be included in a will. However, recognising them as property is only the starting point. The real challenge lies in ensuring their accessibility and proper transfer to beneficiaries in a secure and understandable manner. Inventorying Your Digital Assets The first step in planning for the succession of your digital assets is a thorough inventory. You must create a comprehensive list of all your holdings, including but not limited to: – Types of cryptocurrencies (e.g., Bitcoin, Ethereum, Litecoin)– Locations of storage (e.g., hardware wallets, software wallets, exchange platforms)– NFT assets, including details of what they represent and their respective marketplaces (e.g., OpenSea, Rarible)– Details of staking or yield-generating digital assets– Any passwords, seed phrases, or PINs required for access—although these should never be included directly in the will It is paramount to document this information in a secure and sensible manner. Consider maintaining an encrypted digital file or utilising a reputable password management tool that can store and share this data securely with your designated executor or trustee. This inventory should be reviewed and updated regularly to reflect the dynamic nature of digital portfolios. Legal Mechanisms to Include Digital Assets in Your Estate In the UK, the will remains the primary legal instrument to dictate the distribution of your estate. When it comes to including digital assets, you will need to be explicit and precise. Simply stating “all digital assets” can be too vague. Instead, specify the types of digital assets, and name the beneficiaries for each. While the value of cryptocurrencies and NFTs can fluctuate, the quantitative or percentage-based allocations should be made clear. It is also crucial to name an executor who understands digital assets or is capable of obtaining the necessary knowledge. You may appoint a specialised digital executor—either separately or as a co-executor—who is specifically tasked with managing the process of identifying, accessing, valuing, and transferring your cryptocurrencies and NFTs. Equally significant is the use of a Letter of Wishes. Though not legally binding, it can accompany your will and provide guidance on how executors or trustees should manage digital assets. This letter can contain detailed instructions, including how to access wallets, manage NFTs, or handle income-generating digital ventures. However, never include sensitive information such as private keys or seed phrases in the will or even in the Letter of Wishes. Instead, refer to a secure location where these credentials are stored. Securing Access upon Death Accessibility to digital assets is arguably the most critical component of planning their inheritance. Without private keys, seed phrases, and knowledge of where and how assets are stored, even a clear legal entitlement can be rendered meaningless. Consider the following secure access strategies: – Use testamentary trust structures that can grant trustees authority and means to access digital assets– Store private keys or recovery phrases in a vault or safety deposit box with access instructions disclosed through your estate plan– Utilise encrypted cloud storage solutions with multi-party access protocols– Leverage custodial platforms where access to digital assets can be controlled through formal identity verification processes It is essential that any access solution balances the need for security during your lifetime with usability for your executors or beneficiaries after death. Too tight a security regime might prevent access; too open, and it risks compromise or misuse. Valuation and Taxation Considerations in the UK Valuing digital assets must be approached with care in estate planning, especially as cryptocurrencies and NFTs are highly volatile. For inheritance tax (IHT) purposes in the UK, the value of your digital assets will be assessed as part of your estate’s total value at the time of death. HM Revenue & Customs (HMRC) treats cryptocurrencies as assets, not currency, and thus levies inheritance tax based on their fair market value in pounds sterling at the date of death. This valuation can be complex, particularly when dealing with assets held across multiple blockchains or exchanges, or in the case of less liquid NFTs. Professional appraisal from qualified digital asset valuers may be recommended, especially for high-net-worth estates. Executors will need to report these valuations on probate forms and settle any IHT owed accordingly. If digital assets are sold later to pay taxes or settle the estate, any gains realised can be subject to Capital Gains

Making charitable donations through a residuary estate gift When planning for the future, especially in the context of estate planning, many people find comfort in ensuring that their legacy lives on through meaningful acts. One such act is giving to charity through a will. Among the various methods for including charitable contributions in one’s estate plan, leaving a gift through the residuary estate is both impactful and practical. This approach benefits not only the charitable organisations involved but also provides peace of mind for the benefactor, knowing that their values will continue to be honoured beyond their lifetime. What Is a Residuary Estate? To comprehend the significance of this method of charitable giving, it is essential to first understand the term ‘residuary estate’. When an individual passes away, their estate encompasses all their assets – from bank accounts and property to personal possessions and investments. After all debts, taxes, expenses, and specific legacies outlined in the will are paid or distributed, whatever remains is known as the residuary estate. This residual portion of the estate can be quite substantial or relatively modest, depending on the size of the estate and the number of specific bequests made. Importantly, it represents the final pool of assets that is distributed according to the instructions laid out in the residuary clause of the will. Why Choose This Method for Charitable Contributions? There are several compelling reasons for considering this type of gift for charitable purposes. Firstly, it allows for flexibility. Because charitable bequests from the residuary estate are made only after all obligations and other bequests have been settled, it ensures that the primary responsibilities – such as providing for loved ones or paying debts – are fulfilled first. Consequently, donors can be generous to causes they care about without risking the financial well-being of their beneficiaries. Secondly, this method of giving is particularly appealing to those who may not know exactly how much their estate will be worth at the time of their death. Deciding on a specific donation amount during life can be difficult, especially when future financial needs or potential end-of-life expenses are uncertain. By allocating a percentage of the residuary estate, rather than a fixed sum, donors can ensure that their chosen charities benefit proportionally to the final estate value. Lastly, it simplifies the estate planning process. Many people prefer not to alter their wills frequently, yet financial situations and priorities can change. A residuary gift negates the need to constantly update the specific value of the gift, as it automatically adjusts in accordance with the estate’s total value. How to Set Up a Residuary Gift to Charity Incorporating a residuary charitable gift into a will requires careful wording and proper legal guidance to ensure the intent is fulfilled accurately. The process typically involves adding a clause in the will that specifies how the residual estate should be distributed. For instance, one might state, “I give 25% of the residue of my estate to [Charity Name], registered charity number [XXXXXXX], for its general charitable purposes.” The remaining portion could be similarly distributed among family members, friends, or other charitable organisations, according to the deceased’s wishes. It is highly advisable to engage an experienced solicitor to draft or review the will. Errors in wording can lead to significant complications, including misinterpretation, disputes among heirs, or even nullification of the gift. Solicitors can ensure the will aligns with current legal standards and accurately reflects the intentions of the testator. Choosing the Right Charity Selecting a charity to benefit from your estate is a deeply personal decision. For some, the choice is obvious due to lifelong support for a particular cause – such as children’s welfare, environmental protection, or medical research. For others, the decision may require more reflection and investigation. When considering a charitable beneficiary, it is important to assess not just the cause itself but also the operational transparency, governance, and financial health of the organisation. Potential donors should ensure that the chosen charity is officially registered and recognised by the relevant regulatory body, such as the Charity Commission for England and Wales. This not only ensures legitimacy but may also provide tax advantages. Donors might also consider reaching out to the charity during their lifetime to discuss their intentions. Many organisations have legacy teams or fundraising departments equipped to provide information about how such donations are used, and in some cases, they may even offer suggested wording for wills. Establishing this line of communication ensures that the charity has the capacity and readiness to honour the legacy appropriately. Tax Implications and Financial Considerations Another advantage of making charitable donations through the residuary estate relates to taxation. In the UK, charitable gifts left in a will are exempt from Inheritance Tax (IHT). Moreover, if at least 10% of the net estate is left to charity, the remainder of the estate may qualify for a reduced IHT rate – currently 36%, compared to the standard 40%. This has significant implications for the financial legacy left behind to other beneficiaries. In some cases, a carefully structured residuary charitable gift can result in more of the estate’s value being preserved overall. These potential savings underscore the importance of working with both legal and financial advisors to ensure optimal outcomes for all parties involved. Considerations for Families and Heirs While charitable giving is commendable, it is also important to consider the impact of such bequests on surviving family members and other heirs. Transparency is key. When individuals are open about their intentions and the rationale behind their decisions, it can help reduce misunderstandings, resentment, or even legal disputes after death. Some might worry that including a charity in their will might cause friction among relatives. Yet, many families embrace philanthropy as a shared value, and heirs may indeed take pride in a loved one’s generosity. Having honest conversations about one’s wishes, and perhaps involving close family members in the decision-making process, can make the experience inclusive and affirming. Alternatives to Residuary Gifts Although residuary

How to plan your estate around your business succession plan For entrepreneurs and business owners, the thought of retirement or the potential for incapacity is often overshadowed by the day-to-day challenges of running a business. However, ensuring business continuity and securing your personal and family legacy requires the strategic alignment of estate planning and business succession. While these two realms are distinct, they are inextricably linked. Without considering business succession within your broader estate plan, even the most well-intentioned strategies can falter, putting both your enterprise and your family’s financial wellbeing at risk. Estate planning traditionally focuses on the distribution of personal assets after death, mitigating taxes, and ensuring that your wishes are carried out smoothly. Business succession planning, on the other hand, is concerned with the transition of ownership and management responsibilities of your business, whether during your lifetime or upon your death or incapacity. When these plans are created in isolation, they often miss important overlaps that could either fortify or undermine your long-term goals. Start With a Thorough Evaluation of Your Business Before integrating your business into an estate plan, you must first conduct a comprehensive assessment of your enterprise. This involves evaluating the legal structure, governance mechanisms, ownership details, financial health, and your personal role in daily operations. Different types of entities – whether sole traders, partnerships, limited companies, or family-owned corporations – will influence how succession and estate strategies should be developed. It is also important to understand who the key stakeholders are. Are there co-owners? Are family members employed in the business? Is there an existing shareholder or partnership agreement? Ambiguity around these elements can quickly lead to conflicts or complications during a transition period. A thorough initial assessment allows you to identify potential challenges and proactively develop targeted solutions. Documenting intangible knowledge can also be crucial – your relationships with clients, suppliers, and staff; your unique operational philosophies; and any unwritten protocols that govern your business culture should be captured and communicated where possible. These elements often hold significant value and might otherwise be lost during a hasty or unplanned handover of the reins. Clarify Your Long-Term Vision A cornerstone to crafting both an estate and succession plan is articulating your long-term vision. This includes determining whether you ultimately want your business sold, continued under family control, or transitioned to a respected employee or partner. Each scenario brings with it different legal, tax, and operational implications. For instance, if you wish for a child to take over the business, you must assess not only their willingness but also their competence and interest. Uneven distribution of assets among children – particularly where some are involved in the business and others are not – is a common source of familial discord. A deliberate and transparent strategy that considers both business needs and familial dynamics is essential. If you anticipate selling the business, perhaps to fund retirement or distribute proceeds equally among heirs, this must be planned well in advance to maximise sale value and minimise tax liabilities. The chosen exit path has major implications for the structuring of your estate and should ideally be refined years before anticipated execution to ensure a smooth and tax-efficient outcome. Determine a Suitable Succession Strategy Several tactical options exist for transferring ownership or control of a business. The method you choose should be influenced by your long-term vision, tax considerations, timing, and family or business dynamics. A common strategy for family businesses is gifting shares or transferring business interests over time to children or other family members. This can be done outright or through the use of trusts, which provide a layer of control and long-term protection. Trusts are particularly useful tools in estate planning as they allow you to shield assets from creditors, protect younger or financially inexperienced beneficiaries, and maintain management continuity. Another route involves buy-sell agreements (cross-purchase or entity-purchase agreements), often used when there are business partners or co-owners. These agreements stipulate what happens if an owner dies or wants to exit, often with provisions funded by life insurance, preventing outside parties from acquiring an interest and ensuring liquidity for the estate. Employee ownership trusts (EOTs) have grown in popularity in the UK, especially for owners seeking to preserve the legacy and structure of their business while offering employees a stake. EOTs can also provide attractive tax advantages, but suitability depends on business size, cultural alignment, and financial positioning. Integrate Business Valuation and Financial Planning Accurate and up-to-date business valuation is a critical component of estate planning for business owners. The value of your business will play a significant role in calculating potential inheritance tax (IHT) liabilities, determining equitable distributions to heirs, and assuring sufficient liquidity to settle any debts or taxes upon your passing. A professional valuation should be obtained not just once but periodically updated to reflect market changes, growth, or operational shifts. Embedding this practice into your estate and succession planning protocol enables you to maintain realistic expectations and avoid potential financial shortfalls that could destabilise both your estate and your business. Financial planning should also address liquidity. In the event of your death, your estate may owe significant taxes, often within tight deadlines. If the estate’s wealth is tied up largely in an illiquid business, your heirs may be forced to sell assets hastily or at below-market value to meet tax obligations. Life insurance policies held in trust can be structured to offer cash flow relief, while specific trust or will provisions may allow asset sales or income generation in a tax-efficient manner. Maximise Tax Efficiency Through Proactive Planning One of the chief concerns in aligning your estate and succession plans is the significant tax exposure that can arise. Fortunately, governments offer several reliefs and tools to encourage planning and business continuity. In the United Kingdom, Business Relief (formerly Business Property Relief) can significantly reduce, or even eliminate, IHT on qualifying business assets. To qualify, the business must meet certain requirements and have been owned for at least two years. However,

How to treat jointly held investments in your estate Understanding how jointly held investments are managed upon death is an essential component of comprehensive estate planning. These types of financial assets can bring both simplicity and complexity to an estate depending on their structure, legal jurisdiction, and the intentions of the involved parties. Whether jointly owned with spouses, children, or other parties, correctly treating such investments can ensure financial security for loved ones and help avoid potential legal complications. This article delves into the key aspects of jointly held investments in the context of estate planning, providing clarity on the types of joint ownership, their implications after death, tax considerations, and practical advice for managing and documenting such arrangements. Types of Joint Ownership Jointly held investments can be structured in different ways, each carrying distinct legal consequences. Understanding the classification is the foundational step in determining how they will be treated when an owner passes away. Joint Tenants with Right of Survivorship (JTWROS) is a popular form of joint ownership, particularly among spouses. In this arrangement, ownership of the investment automatically passes to the surviving joint holder upon death of one party, bypassing probate. This method is often used for its simplicity and ability to provide immediate access to assets for the surviving owner. However, its effectiveness in achieving broader estate planning goals may vary. Tenants in Common is another common structure, where each co-owner holds a specific share in the investment, which does not automatically pass to the other co-owners upon death. Instead, the deceased’s share passes through their will or intestacy laws if no will is in place. This method allows for greater flexibility in distributing assets according to personal wishes and is often used in blended family scenarios or business partnerships. There is also tenancy by the entirety, which is exclusive to married couples in certain jurisdictions. Similar to JTWROS, it offers survivorship rights but includes additional protections against creditors. This form is less common in the UK but may apply to individuals with assets or residences in jurisdictions where it is recognised. The Legal Impact on Estate Administration The legal treatment of jointly held investments upon death hinges on the ownership structure. With JTWROS, the deceased’s share does not form part of the estate for probate purposes, as it passes automatically to the other owner. While this simplifies the administrative process, it can inadvertently bypass the intentions set out in a will. For instance, if a testator intended for their portion of an investment to be divided among multiple heirs, holding the asset as JTWROS would override such intentions. In legal terms, the right of survivorship supersedes testamentary instructions, which can be a source of contention among relatives. In contrast, with tenants in common, the individual’s share of the investment becomes part of their estate and is dealt with according to their will. This requires probate but provides clarity and control regarding distribution. Executors will need to value the share and potentially facilitate its sale or transfer to beneficiaries as instructed by the deceased’s will. Conflicts can arise if the ownership structure is unclear or poorly documented. In the absence of definitive records, there may be disputes over whether an asset was held jointly or merely shared for convenience. Courts may be called upon to resolve such ambiguities, which can delay estate administration and increase legal costs. Therefore, maintaining clear records of ownership and intentions is critical. Tax Considerations The tax implications of jointly held investments can significantly influence estate planning strategies. In the UK, inheritance tax (IHT) is often a central consideration. When assets are passed through survivorship under the JTWROS structure, IHT may still be applicable on the value of the deceased’s share. Transfers between spouses or civil partners are typically exempt from IHT due to the spousal exemption. However, when the surviving joint owner is not a spouse or civil partner, the value of the deceased’s share could fall within their estate for IHT purposes. In these cases, jointly held assets are not necessarily a way to sidestep inheritance tax altogether. For tenants in common, the value of the deceased’s share will be included in their estate and assessed for IHT. Careful planning, including taking advantage of the nil-rate band and other exemptions, can mitigate the resulting tax liability. Gifting strategies and the use of trusts are common tools employed in this context. Another taxation consideration is Capital Gains Tax (CGT). When the surviving owner eventually sells the asset, CGT may apply based on the gain since the original acquisition. Inheriting an asset often involves a revaluation or “step up” in cost basis, potentially reducing the gain and thereby the CGT owed. Managing CGT exposure can be complex when dealing with shared investments, particularly if the investment portfolio has grown significantly in value over time. Practical Guidelines for Managing Joint Investments in Estate Planning Clear communication and documentation are paramount when planning around jointly held investments. Ambiguities in ownership structure and intentions often lead to disputes among beneficiaries or tax liabilities that could otherwise be mitigated. Consider the following practices to ensure that joint investments are effectively integrated into your estate plan. First, review all current investment accounts and determine the exact nature of their ownership. Phrases like “joint account” may be misleading without proper legal documentation specifying whether the structure is JTWROS or tenants in common. Work with financial institutions to ensure the correct forms are on file and align with your estate planning goals. Second, update wills and estate documents to reflect the desired treatment of joint investments. Even in JTWROS arrangements, it may be prudent to mention such assets in your will to provide clarity and context for executors and beneficiaries, although legally the assets do not pass through the will. Consistency between legal documents reduces the potential for misunderstandings. Third, where tenants in common structures are used, provide details about your share in your will. Include valuation details, proposed allocation to beneficiaries, and instructions for handling co-ownership with

Handling pensions from multiple countries in estate planning Navigating the complexities of managing pensions accumulated in multiple countries is increasingly becoming a common issue for globally mobile individuals. With career paths now frequently spanning across borders, especially for expatriates, diplomats, international executives, and remote workers, handling retirement benefits accrued in various jurisdictions has developed into a daunting facet of estate planning. Ensuring that these pensions are appropriately integrated into a holistic estate plan requires an in-depth understanding of international law, tax treaties, pension fund regulations, and inheritance rules. Overlooking these elements can have significant implications not only for the value and accessibility of the pensions but also for how smoothly they transition to loved ones upon the holder’s death. A well-structured approach that accounts for the legal, financial, and tax-related differences between countries can protect your beneficiaries and minimise unnecessary administrative burdens during times of grief. Types of International Pensions and Their Legal Frameworks Pensions acquired overseas usually fall into specific categories: state pensions administered by governments, occupational pensions tied to employment, and private or personal retirement arrangements. Each type is governed by its country’s unique legal framework, which impacts issues like contribution rules, benefit eligibility, payout structures, and transferability. For example, a British national who has worked in France, Canada, and the UK may benefit from France’s public pension scheme, Canada’s Quebec Pension Plan (QPP), and their UK National Insurance-linked State Pension. The distinct nature of these systems—one being continental European with mandatory public insurance, another integrating social security with individual investment components, and the UK’s hybrid system—creates a complex entanglement of payouts, taxation, and succession rules. Therefore, any effort at effective estate planning must begin with a detailed inventory of all pensions, accompanied by an understanding of the legal environments in which these assets will be realised or transferred. Soliciting expert legal guidance from professionals with knowledge of the relevant jurisdictions is not just prudent—it is essential. Taxation: A Multifaceted Concern At the heart of integrating foreign pensions into estate plans lies the question of taxation. Many countries tax pensions either at the source (where the pension is paid) or in the country of the beneficiary’s residence. This can lead to double taxation if not mitigated properly, following the guidance of bilateral tax treaties. The United Kingdom, for instance, has double taxation agreements (DTAs) with more than 130 countries. These treaties are designed to ensure that pension income is either taxed only once or that credits are applied so beneficiaries aren’t doubly burdened. However, each agreement specifies which pensions fall under its scope and which country has tax jurisdiction. For example, state pension benefits from the UK may be taxable in the UK, even when the recipient lives abroad, but some occupational schemes may only be taxable in the recipient’s country of residence. Complications arise when treaties are absent or ambiguous. Furthermore, tax treatments may change not just by jurisdiction, but depending on the classification of the pension (employer-provided vs insurance-backed annuity) and the retirement age. Estate planners must develop a detailed tax map, engaging cross-border tax experts to assess liabilities in both accumulation and distribution phases, and structure withdrawals or pension conversions accordingly. Succession Laws and Forced Heirship Criteria One of the more challenging components in planning for the inheritance of pensions across countries is the confrontation between succession laws. Common law countries like the UK offer relatively flexible approaches to inheritance, often respecting the terms of a Will. Conversely, many civil law countries in Europe—such as Spain, Italy, and France—impose “forced heirship” regimes, where the estate must provide specific portions to designated relatives regardless of a Will. This discrepancy affects beneficiary designations in pension accounts. A pension accumulated in France by a UK expatriate may be subject to French inheritance law, especially if the pension assets are tied to property or if the holder resided in France during retirement. Even if the individual specifies in a UK will that a particular adult child should receive all pension proceeds, the French legal framework may require part of it to go to a surviving spouse or all children equally. Estate planning in these contexts needs to account for the interplay between conflicting legal doctrines, perhaps through instruments like trusts (which may or may not be recognised in certain countries), or through careful structuring of pension accounts to comply with automatic beneficiary designations in local law. Engaging legal counsel from each relevant jurisdiction ensures that your estate remains compliant while still fulfilling your testamentary intentions. Currency Fluctuations and Economic Risk Holding pensions in different countries entails exposure to currency risk and economic volatility. A pension denominated in Euros, for example, may lose value in sterling terms if the exchange rate changes unfavourably. Inflation levels, political stability, and interest rates of the pension-holder’s domicile versus the pension-paying nation all affect the effective purchasing power of retirement benefits and eventual inheritance values. This issue becomes particularly pressing when beneficiaries reside in a different currency zone than the origin of the pension. In such cases, it’s wise to consider shielding techniques. Currency hedging, annuity conversions, and diversified draw-down strategies can protect long-term pension values. Moreover, in certain countries, foreign-denominated pensions may be subject to mandatory conversion or special taxes upon receipt, which can further erode their value. Including provisions for such contingencies in estate plans—perhaps by allocating liquid assets available in the local currency to cover immediate needs, or by purchasing insurance or structured notes—can safeguard heirs from unforeseen devaluations. Recognising Administrative and Bureaucratic Barriers Another hurdle concerns the administrative variance in documentation, reporting, and claims procedures for pensions in different countries. When an individual passes away, executors or beneficiaries often must notify local pension authorities, submit death certificates, and sometimes notarised translations, to initiate the transfer of benefits or to stop payments. Bureaucracies differ widely on what constitutes “acceptable evidence” and how long these processes may take. In certain countries, next-of-kin may need to initiate probate or succession proceedings before access is granted—even to funds already assigned to named beneficiaries.