Experiencing the loss of a spouse, partner, or other close family member is one of the most challenging events your clients can face.
Alongside the grief, there’s often a daunting list of administrative and legal tasks that must be addressed.
From applying for probate and managing asset distribution to updating wills and understanding entitlements like pensions, the process can feel overwhelming.
Legal and financial planning professionals can help clients navigate these challenges and enable them to build a new plan that reflects their circumstances, giving them one less thing to worry about during a difficult time.
Read on to find out four ways our professions can work together to support bereaved clients.
1. Managing estate administration and mitigating Inheritance Tax
When a client is bereaved, solicitors typically take the lead on administering the estate. They will likely apply for probate, ensure legal compliance, and oversee the distribution of assets in line with the deceased’s wishes.
Financial planners can also play an integral role. They can assist in gathering key financial documentation, valuing assets such as investments or pensions, and advising on strategies to mitigate Inheritance Tax (IHT) throughout the process.
For example, when it comes to inheriting pensions, if the deceased held a defined contribution (DC) pension and had named their partner as a beneficiary, that partner may be eligible to access the funds via beneficiary drawdown.
A surviving partner may also be entitled to certain other allowances, such as an Additional Permitted Subscription (APS), which allows them to inherit the deceased’s ISA allowance.
By working together throughout the process of estate administration, solicitors and financial planners can ensure the legal duties are met while also protecting clients from paying more tax than necessary.
2. Handling property
If your client held a joint mortgage with the deceased, they may be able to repay the remaining balance using assets inherited from the estate. In some cases, a life insurance policy could also be used to settle the outstanding debt.
However, if the estate does not contain sufficient funds, the surviving mortgage holder may become solely responsible for the remaining debt.
Solicitors can provide vital support by facilitating the transfer of legal ownership and overseeing any potential disputes related to the property.
At the same time, financial planners can guide clients through key decisions – such as whether to keep, sell, or rent out the property – based on their wider financial position and long-term goals.
3. Rebuilding their financial and estate plans
Once the immediate legal and administrative tasks are complete, many clients (particularly surviving spouses) are faced with a new financial reality.
A financial planner can help them by assessing their current financial position and responsibilities. They can use cashflow modelling to map out their income, expenses, and any outstanding debts, while also accounting for variables such as inflation, market fluctuations, and life expectancy, to provide a clear picture of the road ahead.
Once their day-to-day finances are stabilised, clients can begin to focus on the bigger picture. For example, an inheritance may offer them the opportunity to reconsider retirement timelines, reallocate assets, or explore new investment opportunities aimed at improving their long-term financial security.
It’s also an ideal time for clients to review and update their estate planning documents, such as their will, letter of wishes, Lasting Power of Attorney (LPA), and beneficiary designations, which may need legal validation from a solicitor.
Clients may also want to update their insurance policies to reflect their new circumstances and may benefit from putting these in trust. A financial planner can help them explore policy and trust options, while a solicitor can ensure the trust is valid once it’s established.
4. Mediating disputes
In some cases, bereaved clients may find themselves involved in disputes, perhaps with other family members, beneficiaries, or individuals who believe they are entitled to a share of the estate but haven’t received it.
Financial planners and solicitors can work together to help clients navigate these sensitive and complex situations.
Solicitors can provide expert legal advice, representing clients’ interests, mediating negotiations, and, if necessary, managing litigation.
Meanwhile, financial planners can offer clarity on the estate’s financial details, help beneficiaries understand asset values and tax liabilities, as well as any additional information they may have regarding the deceased’s wishes.
Get in touch
To find out more about how our sectors can work together for the mutual benefit of our clients, get in touch.
Email info@blueskyifas.co.uk or call us on 0118 987 6655.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate estate planning, cashflow planning, tax planning, trusts, Lasting Powers of Attorney, or will writing.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
