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Case Study - High Net Worth Clients
Situation
Adrian and Adam have been married for many years and have built a joint estate worth approximately £3 million. Their assets include shares in their successful manufacturing business as well as other investments and property. Their current Wills leave everything to each other on first death and then equally to their two children.
Concerns
Adrian and Adam would like to reduce their potential Inheritance Tax (IHT) liability if possible. They are also concerned about their wealth passing to their children without any form of protection.
Their daughter is already independently wealthy, which raises concerns about the level of IHT their grandchildren could face in the future if her inheritance becomes part of her own estate.
Their son is currently in a difficult relationship, and they worry that any inheritance he receives outright could be at risk in the event of a future divorce or relationship breakdown.
Solution: Solidus Plan
A Solidus Plan would provide Adrian and Adam with new Wills incorporating an integrated protective Trust framework. This structure helps ensure that available Inheritance Tax allowances are fully utilised on the first death.
Efficient Use of Inheritance Tax Allowances
The Trust framework is designed to maximise available IHT allowances on first death, helping ensure that reliefs and thresholds are used effectively within the estate planning structure.
Flexible Support for Their Children
Following the second death, their estate would pass into Discretionary Trusts for each of their children. Trustees can distribute funds as needed, allowing the assets to support the children while maintaining oversight and long-term protection.
Protection from External Risks
Because the assets are held within Trusts rather than being inherited outright, they are outside the beneficiaries’ personal estates. This can provide protection against risks such as divorce or future financial instability. This provides the protection they require for their daughter.
Generational Inheritance Tax Planning
By keeping the inherited assets outside the children’s estates, the Trust structure may help reduce potential Inheritance Tax exposure when wealth passes to future generations, helping preserve more of the family’s wealth for the long term. The use of the trust structure protects intergenerational IHT from being levied on the same asset as it passes through the generations.
