Private wealth, family businesses and family

The uncertainty of what’s to come is understandably keeping many people awake at night but, whilst the scope of what our future may look like is still evolving, one aspect that can be controlled is putting measures and provisions in place to plan for the future and protect the wealth of you and your family. As we all try to pick up from where we left off, there are plenty of opportunities out there for effective wealth planning that will make a real difference.

Wills

Review your existing will 
It’s a good idea to regularly review an existing will, particularly if circumstances change such as entering into new relationships, having children or acquiring new assets.

Make a will 
If you don’t already have a will then you should look to put one in place. Begin putting your thoughts down on paper so you can gain a better understanding of your position and the provisions you may wish to make.

Executors of your will 
Decide on who you would wish to appoint as your executives and trustees to administer your will. Choose the right people for the role – you shouldn’t simply appoint people just because they are family and you feel a sense of obligation.

Guardians 
If you have children under the age of 18, consider appointing a guardian who will take over a parental responsibility. Family heirlooms and specified assets - Consider whether you wish to leave specific items of personal belongings, or indeed specific sums of money, to named individuals or charities.

Funeral wishes 
Although not legally binding, if you have a preference for how you wish your funeral to be carried out, and/or have strong wishes in relation to cremation or burial, then you should consider including instructions within your will. Investments – Seek advice about how a change in the investment market, particularly one where asset values are decreasing, could be a good time to make estate planning decisions.

Powers of attorney

Appoint attorneys
Make sure an ordinary power of attorney, and/or lasting powers of attorney in relation to both your finances and your health and welfare, are in place for you and for family members who do not already have them. Ideally, these should be prepared at the same time as preparing a will.

Appoint people you trust
Ensure that the people you trust the most can help you if ever you’re unable to make decisions relating to your property and financial affairs, personal health or welfare.

Specific powers 
Consider whether you wish for your attorneys to have wide-ranging general powers, which would enable them to manage all your property and financial affairs entirely on your behalf, or have more specific and restricted powers to carry out a particular task or transaction.

Tax saving opportunities

Capital gains tax (CGT)
If the value of your assets have decreased then now may be a good time to make gifts of those assets. As an asset value decreases, then so does the impact of CGT. Our blog on protecting your wealth during a period of uncertainty provides advice on how you can make the most of a falling market.

Inheritance tax
Inheritance tax can arise not only on death, but can also be triggered in certain circumstances when lifetime gifts are made. As with CGT, the tax is based on the value at the time the asset is gifted. You should explore opportunities to make lifetime gifts either to individuals, companies or through trust structures, whilst asset values are depressed.

Future changes in taxation
Any abolition or amendment of tax reliefs and measures could result in significantly higher taxes and a reduction in the options available. Therefore, you should act now and plan ahead. Read our thoughts on the types of taxation that could be affected, further down the line.

Donate to a charity
Gifts to registered charities are exempt from inheritance tax, both in your lifetime and on death. Gifts can be made directly or, if you want to be more actively involved, you can set up a charitable trust either during your lifetime or under your will.

Family businesses

Protecting wealth
Now may be a good time to reorganise the share capital of family businesses to create different levels of shares, reorganising them in a way that satisfies all parties in relation to reward and control, whilst potentially mitigating any one or more of inheritance tax, capital gains tax and income tax.

Loss of capacity
Consider making lasting powers of attorney specifically relating to your business role, or reviewing existing ones to ensure that important decisions can still continue to be made should you become incapacitated.

Family matters

Court hearings
If you have a case that has already been listed then check that arrangements have been/are being made to hold this remotely. If you are the applicant then the responsibility for making these arrangements falls to your solicitors. If you do not have solicitor representation yet then the respondent’s solicitors will need to make these arrangements. Our blog on remote court hearings gives an overview of how these work in practice.

Child arrangements
If your child’s time is usually divided between yourself and another parent then that child should continue to see both parents (subject to any restrictions which may override those existing arrangements, such as households having to self-isolate with COVID-19 symptoms). Take a common-sense and co-operative approach to making and adhering to arrangements during this difficult time. However, if you’re unable to reach an agreement with your co-parent, speak to a solicitor to negotiate and settle the arrangements on your behalf, or if that doesn’t work, they can make an application to the Family Court. Watch the recording of our recent webinar on maintaining child arrangements during COVID-19.

Financial settlements
If you’re in the middle of negotiations then it is likely that the disclosure you have already exchanged reflects a much healthier previous financial position. Considerations should be given to existing valuations, and also if there has been a sudden change of income, as this is likely to negatively impact access to capital. Our blog on the impact of coronavirus on financial settlements explains the position where it looks likely that one party may be declared bankrupt in the near future.

Contact us
In response to the pandemic we created our coronavirus hub which includes advice, guidance and insight to help you navigate through these uncertain times. As we all begin to adapt and prepare for the future, our hub will evolve to provide you with further help and resources for surviving, reviving and beginning to thrive in life and business, throughout the challenging times ahead.

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to director’s responsibilities, insolvency, restructuring, funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call 0800 689 4064.

For legal support in relation to the coronavirus or any other matter, get in touch with your team today.

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