Chairs facing beach

Later life and legacy

Stage six


Life events

  • Paul and Susan have stopped working and are relying on their own investments and pensions to generate retirement income.
  • They are now more focused on preserving their wealth and income than accumulating it.
  • They are enjoying the desired lifestyle they have spent their lives planning for.
  • They are considering how to pass on wealth to their children and grandchildren.


  • Estate planning and mitigating inheritance tax, i.e. gifting surplus capital/income, use of trusts.
  • Wills and Lasting Powers of Attorney.
  • Nursing care costs.

How do we help preserve Paul and Susan’s wealth for future generations?

Paul and Susan’s thoughts now turn to how to preserve the hard-earned wealth they have accumulated for their children and grandchildren. Their overall wealth stands at £3,135,000 with a potential inheritance tax bill of £314,000. They are looking for a strategy to help preserve their wealth, pay less tax and pass it on to their children and grandchildren.

They take some advice from their Crowe Financial Planning Consultant.

We helped Paul and Susan to utilise their available allowances and concessions without doing anything that could be considered ‘high risk’. It also used tried and tested planning methods that would not be considered to be aggressive or contentious by HMRC.

We provided advice and recommended a sensible planning strategy which helped them reduce the inheritance tax liability on their estate and pass on more of the wealth they had accumulated to their children and grandchildren, whilst ensuring their own needs are met both now and in the future.

Reviewing their pensions

Under the pension freedom rules Susan’s pension will not be included in their estate for Inheritance Tax (IHT) purposes and therefore Susan needs to check the nomination and expression of wishes made on her death to ensure that their children and grandchildren have been included as potential beneficiaries (Paul is unlikely to need Susan’s pension fund to maintain his income requirements in the event of his wife pre-deceasing him).

A strategy for drawing less income from Susan’s pension is also considered as this will help pass more capital to beneficiaries without being subject to inheritance tax.

Making gifts

Paul and Susan also decide to utilise their annual gift exemption of £3,000 each to save for their grandchildren. This will be handy when it comes to funding future university fees for them.

They also transfer £100,000 of their invested funds into a discounted gift trust (DGT) to generate an income for themselves whilst gifting the capital to their children and grandchildren tax efficiently on their deaths. This provides an immediate reduction in the value of the gift for inheritance tax and will completely remove it from their estate after seven years, saving at least £40,000 in inheritance tax.

A partial ISA transfer of £50,000 is made into an AIMs ISA portfolio, accepting that this investment is higher risk. This will provide exemption from inheritance tax after two years, saving a potential £20,000 of inheritance tax, whilst retaining access to the funds themselves should they need to in the future. 

Reviewing their will

Working with their solicitor, their Consultant advises them to review their wills to ensure that their wishes are accurately reflected and at the same time set up Lasting Powers of Attorney for both Property and Financial and Health and Welfare. This will give them the peace of mind that their affairs will be taken care of by the people they trust should the need arise in the future.

Long-term care needs

As part of the overall planning process their Consultant takes into account what their future long-term care needs (nursing care) might be, providing a cashflow analysis of future expenditure and care costs for them. This provides Paul and Susan with the reassurance that they have sufficient provision by way of income and capital to meet this need if required in the future.

What does this mean for the Wells family?

Paul and Susan now feel that the hard work they have put in to establishing their own wealth (on which they have already paid significant tax over the years) has been worth it and that they can now live their desired lifestyle whilst seeking to pass on this benefit to their children and grandchildren. It also gives them peace of mind that their affairs are well managed and in order.

Financial support throughout your life

Find out what each stage for Paul and Susan Wells brings ...

Related podcast

In this episode of Crowe Casts, we are joined by Sue Daye, Partner, Private Clients, and Phil Smithyes, Partner, Head of Financial Planning.

Crowe Financial Planning UK Limited is authorised and regulated by the Financial Conduct Authority (‘FCA’) to provide independent financial advice.

The information set out above is for information purposes only and does not constitute advice to undertake a particular transaction. Appropriate professional advice should be taken on specific issues before any course of action is pursued.  Any advice provided by a Crowe Consultant will follow only after consideration of all aspects of our internal advice guidance.

Past performance is not a guide to future performance, nor a reliable indicator of future results or performance. The value of investments, and the income or capital entitlement which may derive from them, if any, may go down as well as up and is not guaranteed; therefore investors may not get back the amount originally invested.

The Financial Conduct Authority does not regulate estate planning or tax advice. 

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