Case Studies

Mr. and Mrs Cookson – Northolt

Mr. and Mrs Cookson wanted to protect their main asset, their home, for their three children. Two sons and a daughter.

They are in their fifties and had a friend who had lost her husband recently. The friend had experienced unforeseen difficulties with her estate probate.

They chose a Property Trust in their wills. Each of them were able to guarantee to give their half of the family home to their three children on their passing.

They also had a Right to Occupy trust in each of their wills, guaranteeing that the survivor would always live, rent free, for life in their family home or any other ‘main’ residence they may subsequently purchase.

The benefits for the three children were significant and the trust also guarantees that the RNRB (the new Inheritance Tax law that came in 2017), additional Inheritance Tax allowance, will be claimed successfully for both Mr. and Mrs. Cookson as it meets the criteria of ‘direct legacy of the house to the children’.

Their situation is very common and we always offer the Property Trust to parents who care about their family home and want to guarantee that Inheritance Tax at 40% is not paid un necessarily.

Mr. and Mrs. Ahmed – Chingford

Mr. and Mrs. Ahmed have worked continuously and tirelessly to create investment value in their buy-to-let properties.

In addition to their family home, where their two children have now left for university, they want to protect their property investments.

We undertook an Inheritance tax assessment detailing all the net values of their portfolio (they had outstanding mortgages).

We then calculated their tax liability. As a result we transferred some property, that they were not living in, to their children.

They hope and expect to live another 7 years to avoid inheritance tax liability.

We put the estate into a Flexible Life Interest Trust to protect their assets and  put their family home into a Property Trust to guarantee the additional RNRB tax allowance. The RNRB can be claimed successfully for their children.

We have dramatically reduced their Inheritance Tax liability.

Mr. and Mrs. Johnson – Dulwich

We had already prepared their mirror wills and updated them in 2017 when the new Inheritance tax RNRB laws came in.

Mr. Johnson had elderly parents who were concerned about their mobility and knew of many friends who had dementia and similar conditions. They were well aware of the problems that this caused their friends in day to day living.

We explained to them the benefits of having a Lasting Power of Attorney. After completing the application forms for their parents, as the ‘Certificate Provider’, we registered their LPA’s for them, giving the legal ability of decision making to their son, Mr. Johnson.

Having been through the process for their parents, Mr. and Mrs J, aged 54 and 52, decided to do the same for themselves.

We produced the LPA’s for the elderly parents, granting immediate use. For Mr. and Mrs. J, we stored the LPA’s until they are needed. We appointed all of their four children as ‘joint and several’ attorneys because two of them lived miles away.

This has guaranteed that their children will be able to make decisions to look after their parents best interests when needed.

Mr. and Mrs. Pelman – Croydon

Mr. Pelham was about to retire and wanted to sort his affairs out. Their property was their main asset.

They were not sure of their Inheritance Tax situation and were worried that their two sons would see 40% taken from their estate before it passed to them.

Mrs Pelman was about to inherit from her late father.

The oldest son lives at home and has a learning disability preventing him from having a job. He relies entirely on benefits.

The solution was to gift the younger son the flat, about to be inherited by Mrs. Pelham.

The complication was that Mrs. P’s sister was due half the value of the flat. We arranged for an equity release (this plus the remaining cash from her father) was enough to pay her sister her half of the value of the flat.

So, the younger son was gifted 40% of the flat in a ‘Declaration of Trust’ which we registered at the Land Registry. This meant that the parents still kept control of the flat but the values were carefully calculated, in our Inheritance Tax assessment, so that no Inheritance Tax is due.

Mrs P is in good health and expects to survive 7 years (to avoid Inheritance Tax on this gift).

In their wills, Mr and Mrs. P have included a Property Trust (which includes a Right to Occupy trust with lifetime interest), which specifies that the older son can continue to live in their home.

The property Trust protects both sons from ‘sideways disinheritance’ and has additional valuable benefits for the family. This trust guarantees we will be able to successfully claim the extra Inheritance Tax relief – The RNRBM- for the sons.

We critically, also included a ‘Vulnerable Persons’ trust for the older son, ensuring, not only his confirmed right to live in the family home but that his benefits will be unaffected by his inheritance.

Mr. and Mrs. P were able to enjoy peace of mind.