Saving an estate ￡1m in Inheritance Tax.
Talis Independent Financial Advisers
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Jeremy Cleminson is our featured adviser for the month of September.
One of his specialisms is long-term care work – that is, when someone loses their capacity to look after their finances as a result of illness (such as dementia) or an accident. When that happens, if there is no family member or person with Power of Attorney, the Court of Protection allocates a Deputy that steps in to oversee how someone’s finances (and or health and welfare) are managed.
Jeremy specialises in working with attorneys and deputies to help them make the right decisions about how someone’s finances are administered in the best way for them, and their estate.
Jeremy emphasises, “In my view, it’s all about acting in the client’s best interests, particularly when they are no longer able to recognise it. A case that I consider a great success involved a client in their seventies who had been living with dementia for several years and experiencing rapid deterioration. They held a complex and extensive asset portfolio, including property, and we were facing a potential inheritance tax (IHT) liability exceeding ￡1 million upon their passing. Despite having distant relatives named in their will, none of them could help. Therefore, my role revolved around guiding the Deputy through the process of selling properties, liquidating assets, and minimising the tax burden.”
With this type of planning, we often don’t have the certainty of meeting the time constraints to mitigate IHT liabilities. This is just one of the reasons why estate planning at an early stage is critical, especially if you have a large estate.
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In this case, working with the Deputy, Jeremy was able to realise over ￡2 million in cash and reduce the IHT burden without gifting the client’s assets – something that is particularly challenging for an attorney or deputy. By investing funds effectively, he was able to ensure that not only were his client’s financial and care needs met during their lifetime, but also that ￡1 million in IHT was saved for the estate.
As Jeremy points out, “when health issues make it impossible to guarantee you’ll meet time constraints, it becomes all about looking at the short, medium, and long-term objectives, and making sure the client is on the right path. In this case, we were successful. Although my client sadly died in the third year, and no longer had the capacity to recognise what we had achieved, I like to think they would have found satisfaction with the outcome of our efforts.”