How many of us know, with certainty, what will happen to our own estate?
The question becomes more difficult when trying to understand someone else’s estate plan, especially our own parents. The answers may range from “I have a trust to take care of that” ….to.… “I don’t care. I will be pushing up daisies by then!”
Fortunately, many parents do discuss their plans. The one that sticks out in my mind is when I was told:
“the Krugerands are below the floorboards and the gun is under the stairs”.
Quite what these kindly pensioners envisaged was not clear. Did they expect their daughters to shoot the tax inspector when he came to dig up the floorboards? Needless to say, the girls were worried about what they may face in future.
Joking aside, often children are reluctant to broach the subject. The emotional obstacle can be huge. Aside from having to face up to the prospect of losing a parent, children do not want to come across as “after the money”, nor do they wish to risk creating family tensions by asking this question.
The UK is a Common law country which respects “testamentary freedom” to choose what happens to our assets on our death (within reason and after tax of course!). However, poor use of this freedom can mean that the first thing a spouse or child inherits is a problem. The financial legacy follows later.
So what can a family office do about this? The office is employed by the family, to assist in the management of its business and personal administration over generations. Its independence can help families address succession in a calm and objective manner. By acting as a gate-keeper, the office can keep a family’s affairs private by making enquiries on possible solutions on a “no names” basis. Finally, the office will do the research and organise a “beauty parade” from which the family can select the professional services firm to assist.
Meanwhile, top tips…..
Try to understand your situation now and plan rather than wait until it is too late.
There is a lot of information out there when you are ready to look.
So be brave, deep breath and start that dialogue.