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Case Study - Single Person
Situation
John is a widower with two children, Emma and Peter. His current Will leaves his estate equally to his children, or if they predecease him, to his grandchildren.
Concerns
Peter is independently wealthy. Although John still wants him to receive an equal share of his estate, he is concerned about the amount of inheritance tax (IHT) that might be payable when it is subsequently passed on to his grandchildren.
Emma is in a very unstable relationship and is currently living with her father. He wants his legacy to help secure her future independence but is concerned about her unstable relationship.
Solution: Solidus Beneficiary Protection Plan
A Solidus Beneficiary Protection Plan would provide John with a new Will that leaves his estate to a Discretionary Trust, rather than passing assets to Emma and Peter absolutely.
Flexible Access to Funds
The Trustees can distribute funds to Emma and Peter as needed, ensuring support is available while maintaining oversight and protection.
Protection from External Risks
Because the assets are held within the Trust, they are generally outside the beneficiaries’ personal estates. This can provide protection from divorce settlements or financial instability. This would satisfy Peter’s concerns for Emma and her legacy being protected from potential sideways disinheritance.
Generational Inheritance Tax Planning
By preventing assets from becoming part of Peter or Emma’s estate, the Trust may help reduce or avoid additional inheritance tax when wealth passes to the grandchildren. The Trust structure protects this part from intergeneration IHT.
Security for Emma’s Future
The Trust structure can safeguard Emma’s inheritance while still allowing it to be used for her needs, helping secure her independence.
