None of us want to think about a time when we aren’t able to live independently, and we certainly don’t relish talking about what happens after we die. But, in addition to being one of the most neglected aspects of financial planning, it’s one of the most important.
Back in the day only wealthy people had to worry about planning how their estate would be managed after they are gone or incapacitated. Today, protection planning is an everybody problem.
Protection planning covers everything from estate protection to Inheritance Tax, long term sickness protection, late life care and living wills and power of attorney. It’s pretty complex and requires specialist advice and experience to create a protection plan that reflects your financial needs as well as your welfare as you age.
When it comes to protecting your estate (and you), we’ll give all the help, advice and support you need.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.
The writing of a Will or Powers of Attorney involves the referral to a service that is separate and distinct from those offered by St. James’s Place. Wills and Powers of Attorney are not regulated by the Financial Conduct Authority.
Inheritance Tax
If you want to avoid HMRC being the biggest beneficiary of your estate, then it’s time to start planning for what happens after you’re gone. Even if your estate is relatively modest, inheritance tax can take a nasty bite out of its value. If you have a large estate the implications are huge.
Protecting against your estate overpaying inheritance tax has a lot to do with careful planning, ahead of the game. When you’re gone it’s too late.
There are a number of ways to prepare:
We work alongside four leading law firms, who provide legal services, including Inheritance Tax, marriage issues and general tax planning.
Plan today, save tomorrow. Simple.
The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount initially invested.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.
*Will writing involves referral to a service that is separate and distinct to those offered by us. Wills are not regulated by the Financial Conduct Authority.
Tax Efficient Gifting
No matter the size of your estate, using tax free gifts to take advantage of Inheritance Tax exemptions, is a great way to minimise taxes for your beneficiaries after you die (and see them enjoy your gifts to them while you’re alive).
Like everything, gifting comes with its own set of regulations. We will help you find the right options for you and your beneficiaries. For example, there is a £3,000 annual tax exemption for gifting. You can also use your current income to fund contributions to a life policy held in Trust*, which can be exempt if you meet certain criteria. Parents can gift up to £5,000 to their dependents. In certain circumstances a lifetime gift of capital, designed to maintain a dependant, might also be exempt.
You can gift to charities, make donations to political parties, colleges, museums and the National Trust. Finding the right gifting strategy will enhance the performance of your estate and ensure your beneficiaries enjoy the full value of your estate.
The levels are bases of taxation, and reliefs from taxation can change at any time. The value of any tax relief is generally dependent on individual circumstances.
*Trusts are not regulated by the Financial Conduct Authority.
Protection Insurance
We have a need to protect those things and people we hold most dear. Selecting the right type of protection insurance can be difficult – there is so much choice out there. When you think about protection planning what sort of cover comes to mind?
Please note, the above are not offered by SJP
I think most of us would say all of the above, but many of us aren’t covered the way we should be. Figuring out what you need to cover and for what value is just the beginning of it. Covering for loss of income, illness, and disability should be up there with your home and car insurance. Sadly, most people have no coverage for these vital areas of protection planning.
Providing protection cover for every aspect of life is one of the cornerstones of our business. We work with carefully selected providers, covering all types of protection cover, including (but not limited to):
We would love to sit down with you and discuss your own personal circumstances, and help you craft a protection plan that compliments your retirement and investment plans, as well as bringing real peace of mind.
Later life planning
Planning for later in life can be difficult, as making decisions that will affect the quality of your retirement, and medical care, comes with a lot of stress.
Working with you – and your family members where necessary – we can develop a plan that will give you peace of mind and confidence that you will be able to meet your long-term financial needs.
The average cost of UK residential care is £34,944 a year – £49,724 if you also need nursing care.* The average stay is three years, so costs can quickly add up*.
The St. James's Place Later Life Planning Scheme gives you peace of mind by helping you to plan for Inheritance Tax (IHT) and secure an income to help cover any long-term care costs.
We need to consider every aspect of your later life, for example:
The value of an investment may fall as well as rise. You may get back less than the amount initially invested.
If the income taken exceeds the growth on the Plan, the capital will be eroded.
The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.
*Source: Laing and Buisson Care Homes for Older People, 32nd edition, 2022
**Trusts are not regulated by the Financial Conduct Authority.
Long term care
If your personal assets are more than £23,2501 (and you live in the UK or Northern Ireland), you will have to pay for any long-term care you might need. In Scotland, that figure is £29,7502. In Wales it’s £50,0003.
Arranging care for yourself, or a loved one, is very emotional and extremely complex. Dealing with issues such as mental capacity, eligibility for state benefits, Lasting or Enduring Powers of Attorney*, the type and location of the care home and funding the care itself can be extremely stressful. Most people find this aspect of financial planning very upsetting.
The 'single' average cost of a residential care home in the UK is around £34,944 a year, increasing to more than £48,812 if you need nursing care. With the average stay at about three years, costs can be huge.4
If you have to fund long term care fees yourself, you have a lot to consider. Will the home be one you like? How will funding this affect what you pass on to family, who will make decisions for you should you find yourself incapacitated. It’s a long, painful, list of considerations.
Paying for care can be an expensive long-term commitment. There are pros and cons to the various funding options available, so it’s important to get financial advice from a specialist as early as possible.
Whether you’re concerned about future care home costs or you’re facing the prospect of paying for them now, we can help you and your family make the best choices.
* Powers of Attorney involve the referral to a service which is separate and distinct to those offered by St. James's Place and are not regulated by the Financial Conduct Authority.
References
1 Age UK, Paying for a care home, 2 December 2022
2 Age UK, Care Home Guide: Funding, May 2022
3 Age UK, Paying for a permanent care home placement in Wales, April 2022
4 Laing and Buisson Care Homes for Older People, 32nd edition, 2022
Estate Administration
After you pass away the legal, financial and personal tax affairs associated with your estate need to be professionally executed.
All assets will need to be dealt with after you have passed on. These could be property, investments, personal possessions, and liabilities, such as outstanding debts and estate expenses. As with Trusts and Trustees, assigning an estate administrator can help protect the estate from being handled incorrectly.
The process of designating administrators involves obtaining a grant of probate (confirmation in Scotland) and ensuring that all beneficiaries understand who is administrating the estate. The administrator will need to cover a long list of tasks, including:
• Notifying beneficiaries and dealing with their questions
• Redirecting post and cancelling or transferring utilities
• Dealing with any Income Tax liabilities
• Advising on the distribution of assets to avoid or mitigate tax liabilities
• Calculating and paying Inheritance Tax where relevant
• Dealing with specialist legal work.
Administering an estate is complex and often long-winded. Not only is it a burden in terms of time, you will be liable for any mistakes made during the distribution of an estate. Estate administration is rarely straightforward. That's because it involves procedures (and laws) most of us aren’t used to dealing with, and financial matters that are often the last thing anyone wants to think about at the time of loss of a loved one.
SJP work alongside Kings Court Trust as their preferred provider of estate administration. Kings Court Trust is one of the leading specialist estate administration service providers in the UK and, like us, they place their clients at the heart of everything they do.
The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is dependent on individual circumstances.
The services provided by Kings Court Trust are separate and distinct from those offered by St. James's Place.
Wills and Powers of Attorney
Making a Will
Everyone should have a Will. Without it, your loved ones face a more complicated (and often harrowing) process after you die. Not only will your estate be subject to a broad brush approach by the Office of Probate, it’s likely your wishes won’t be met. The safest thing is to have a well written (regularly reviewed) Will in place.
A well-crafted Will ensures that your wishes are met and that you pass on your wealth and assets to people who you want to benefit and not just as per the family tree determined during Probate. A good Will also ensures that you make the most of tax relief which can dramatically affect Inheritance Tax.
Arranging a Lasting Power of Attorney
One of the most difficult things to think about is a time when you are no longer able to manage your affairs yourself and you need others to help you make important decisions. There is more to a Lasting Power of Attorney than just having a long term, late life care plan in place. What happens if you find yourself dealing with an unexpected illness or accident, who would be there to make important decisions for you?
A Lasting Power of Attorney will enable those given the power to make decisions about your property and financial affairs, your health and welfare, or both. It’s also important to consider having a power of attorney in place for your dependents. As your children grow, and move away from home, they may not have a spouse who can act on their behalf. Or, if they are at university they will need a power of attorney in place in case they find themselves in need. When your children turn 18 you can no longer make decisions on their behalf. Lasting Power of Attorney’s work for all ages and should form an integral part of your future plan.
We work with many highly experienced legal service providers who can arrange Wills and Lasting Powers of Attorney, and we can refer you to them when you need it.
The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.
The writing of a Will or Powers of Attorney involves the referral to a service that is separate and distinct from those offered by St. James's Place. Wills and Powers of Attorney are not regulated by the Financial Conduct Authority.
Professional Trustee Services
A Trust is created to ensure the equitable management of assets and is an agreement between the owner of the assets and the trustees. Trustees legally own the Trust’s assets, but they cannot benefit from them, unless they are also beneficiaries.
A Trust is a legal entity that holds assets before they are released to the Trust’s beneficiaries. Assets held in Trust are separate from your estate for probate purposes.
Trusts are an important financial planning tool. A trustee is often not a member of your family and is a person who has experience in manging funds and making important financial decisions. It may also be beneficial depending on your domicile to ensure that the trust remains offshore.
Whether you appoint professional, or lay, trustees their core duties remain the same: primarily, to administer the assets on behalf of all beneficiaries and carry out the terms of the trust. That said, there are times when a Professional Trustee service can bring added benefits.
Professional trustees not only owe a higher duty of fiduciary care, but can act with more objectivity and impartiality. They have the expertise, specialist knowledge and experience to identify potential problems, provide solutions and generally promote good governance. They ensure professional standards are adhered to and that administration requirements are met.
We work alongside Jersey’s Genus Trust Company to provide professional trustee services. They specialise in providing trustee services for a wide range of trusts. Jersey has complete autonomy of its internal affairs, including taxation and other legal matters. This, coupled with its strong financial infrastructure, make it a leading centre for international finance.
The Genus Trust Company was established to forge lasting relationships, and to provide services and solutions. The trustees represent the interests of beneficiaries and make sure due regard is given to clients' wishes and guidance.
Trusts are not regulated by the Financial Conduct Authority. However, please be aware that Genus Trust Company Limited is regulated by the Jersey Financial Services Commission.
The services provided by The Genus Trust Company are separate and distinct from those offered by St. James's Place.
The Partner Practice is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products. The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.
JPS Wealth Management Ltd is registered in England and Wales, Number 09274545. Registered Office: 14a Montpelier Place, Brighton, BN1 3BF.
