Martin & Carole – Investing an Inheritance

Carole lost her father several years ago, and, after suffering a short illness, Carole’s mother passed away nine months ago. Carole recently received her share of the Estate.

With retirement looming, ideally Carole and Martin would like to remain in their current house. They still have a small mortgage to repay, and their son still lives with them at home. Their main concerns were:

• How can the inheritance increase their retirement income?
• Given the value of their Estate, can they reduce their potential IHT liability?
• Should they repay their mortgage now or let it run its term?
• Can they help their son with a deposit for a flat?

How we helped Martin & Carole:

• We assessed their immediate income, expenditure and likely pension income
• Selected a number of different investment plans and looked to see how these could generate additional income
• Considered using trusts so that they would start to fall out of their estate.
• Reviewed their Will
• Worked out the mortgage payments over the remaining term compared to repaying it now with the redemption penalty
• Determined whether it was more beneficial to downsize now – with the associated costs and how freed up equity could help
• How gifts from the Bank of Mum & Dad would reduce their income and the effect it would have on the value of their Estate

Benefits for Martin and Carole included that they had a clearer pathway of how to approach their retirement and a plan to deal with the inheritance in the most effective way.

When people are retiring, it is not uncommon to also lose their parents at this time – compounding the complexity since they already have a considerable change in their lifestyle. This can be daunting and overwhelming.

For Martin and Carole, this was the first time they were going through this, however, for us, it is a situation we are very familiar with, and we were able to guide and work with them to achieve the best outcome based on their needs.