Single Persons

Generally, relatively few people receive adequate advice on the protection and inter-generational tax planning of their estate, be it pensions, Death in Service (DIS) benefits, life cover, property assets, savings and investments or lifetime inter-generational transfers.

Integrated financial planning and effective legal planning are essential in delivering the desired outcomes for single clients. The use of lifetime and deathtime Trust frameworks is a popular, reliable solution but many clients are rarely advised to use them by legal service providers and others are led to believe they are overly complex, which need not be the case.

Many single people do not even have a Will at all and do not fully understand what difficulties can be created at probate and that their assets may not be directed where they would like them to go under intestacy rules.

Thankfully, the majority of clients have simple Wills that direct assets “absolutely” to their chosen Beneficiaries which is effective for directing wealth but inefficient in protecting it.

If you are a parent or have family members who you wish to benefit from the wealth you have created during your lifetime, you should consider any possible future outcomes that may befall your chosen Beneficiaries, or any concerns that exist now or may emerge in the future.

Common concerns many single persons may have are;

• If they are not currently in a relationship, will the inheritance you leave potentially be at risk from a future partner?
• If, historically, they are not good with money will your inheritance be used wisely?
• Is there a controlling partner?
• Are any relationships less than solid?
• Is there a blended family relationship where a risk exists of your wealth not passing to only your family members in future years?
• Are any Beneficiaries wealthy enough in their own right such that your generous inheritance might create a future IHT issue for them and ultimately their children?

If you look beyond the inheritance to the Beneficiary, you will appreciate the potential threats that may occur in the future and should act now to address any concerns which may exist.

If you are cohabiting, and wish to leave an inheritance to a partner please see the e-brochure Protection of the Estates of Cohabiting Couples.

Generally, few single clients receive adequate advice on the protection and inter-generational tax planning of their estate, be it pensions, Death in Service (DIS) benefits, life cover, property assets, savings and investments, or lifetime inter-generational transfers.

Integrated financial planning and effective legal planning are essential in delivering guaranteed outcomes, and DIS benefits are one of the most significant considerations often neglected by providers of legal services. This is largely because single clients are unaware of the risks to their DIS benefits and do not understand the simple steps that can be taken to address them.

The unpredictability of life requires us to be prepared. DIS is an excellent employer benefit that will pay out tax free (in many cases at the discretion of your employer) to your chosen Beneficiaries if you are employed by them when you die. It is good practice to check the details of your employer’s scheme and its benefits and establish the value of any likely payment.

Your DIS benefits will be paid to the approved nominated Beneficiary (normally your child or another family member) and it will be their choice as to how to use the funds. If you need to pay off debts on your death, for example a mortgage or pay a potential Inheritance Tax (IHT) bill, then consider life assurance (written into Trust, of course) to cover such debts rather than using your DIS benefits.

You should consider now any possible future outcomes once your child, family member or Beneficiary receives the DIS payment.

• If they are not currently in a relationship, could a future partner make a claim to the DIS payment?
• If, historically, they are not good with money, will they use the DIS benefits wisely?
• Is their partner controlling or the relationship less than solid?
• Is the nominated Beneficiary already financially independent? (Inter-generational taxation may be a factor to consider.)