Dying to sort things out…

By Mark Penston

Sadly, one of the motivators for people to sort their financial affairs out is because they, or perhaps one of their parents, have discovered that they are close to death.

The notes I have made below focus on ʻthe crash course to deathʼ but of course many of the items should be part of good financial housekeeping anyway, because you never know…


Will and Lasting Power of Attorney (LPA)

This is not a service we offer, but nonetheless over half of all the clients we meet haven’t done a will (even the ill ones!). Google what happens if you die with-out a will (dying intestate). Ask you solicitor too about why you should do an LPA.

Pensions (not necessarily inheritance tax (IHT) free)

Recent changes in pension legislation (Pensions Freedoms) have made pensions highly effective IHT planning investments. Some pensions can now be passed down the generations outside of the estate, but nominations need to be made to ensure that wishes can be followed and funds kept outside of your estate.

Pensions – Immediate payment

If life expectancy is under 12 months, then some pensions can be paid out as a tax-free lump sum before death. This can provide valuable funds at a time of need.

Using Business Property Relief (BPR)

If you own a business it may qualify for business property relief which can give you options on how your business wealth is passed on in a tax efficient manner. It’s a complex area but seeking early advice can help to plan ahead.

Death in Service nomination

Many people have life cover through their employer. Most schemes will allow you to nominate (or direct) who the proceeds should be paid to on death. This allows payment to be made directly to a beneficiary without going through your estate.

Life Assurance.

An important area to address if you are well. Is it set up correctly and could the use of a trust save time and money? If your life expectancy is limited, check whether any benefits can be paid out before death.

Inter-spouse transfers & CGT

With the knowledge that transferring assets between spouses does not trigger any taxation and that capital gains tax liability dies with the individual, consider rear-ranging assets to limit taxation.

Putting ISAs outside the estate

Although ISAs are tax efficient, the downside is that these investments are generally included in your estate for inheritance tax purposes, unless they are invested in assets that are specifically zero rated for IHT. A niche area, but one that should be explored if ISA funds are significant.


Please note that this is a rough guide on the topics covered and advice should always be sought before and action is taken.

Penston is Partner and Chartered Financial Planner with Bluesky Chartered Financial Planners

0118 9876655