The bitterest tears shed at graves are over words unsaid, and deeds undone
Family succession planning is a multifaceted process, involving both practical and emotional challenges. Legal, tax and financial considerations have established rules, but psychological and interpersonal dynamics have critical roles to play too
- Procrastination: everyone wants to go to heaven, nobody wants to die. You don’t have ‘ample time’, it’s not ‘too early to plan’, and ‘haven’t gotten around to it’ just sucks!
- Lack of a clear successor: if that’s a problem now, just imagine the shit that’ll happen when you’re dead..
- Family conflicts: see 2
- Poor communication: not involving family members in discussions often leads to misunderstandings and disputes. Where there’s a Will there’s a relative. Poorly drafted Wills are easily challenged
- Tax liabilities: You’re dead, your family have 180 days to pay Inheritance Tax (IHT), before probate is granted. Assets may have to be sold at short notice to pay IHT. Interest on unpaid IHT is 8.75%
Higher rate taxpayers can face a marginal rate of 64% on inherited pensions, and as high as 90%! The delay and complexity of the new pension rules likely will lead to financial gridlock in the probate process
- Outdated plans: succession plans need to be regularly updated to reflect changing legislation and circumstances (farmers and business owners in particular!)
- Governance gaps: a lack of formal governance structures leaves businesses subject to mismanagement, and worse..
Be aware, HMRC’s objective is to extract maximum tax from everybody, regardless of what the law, or the rules of ethics say, particularly death duties
Time to properly plan? Arrange your FREE power-hour discussion HERE. You’re free to accept, or refuse, and there’s no obligation whatsoever
All tax advice is provided, in writing, by a Chartered Tax Advisor
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