MTS CASE STUDIES

Family Wealth Management

family-wealth-management

David and Elizabeth (Aged 74 and 70) had run a building contractors for over 40 years and have now been retired for a number of years. David had managed their personal finance’s diligently and successfully for their entire working life, over which time they had built up a net worth of £3 million. As they were getting in to later life the management of their personal wealth was becoming stressful.

Main Objectives

  • Support of the long term planning of their family wealth.
  • Management of their income from pensions and rental property income to ensure they never run out of money.
  • Investment management of the Investment and Pensions.
  • Ensure their wealth transfers to their children and grandchildren without unnecessary Inheritance Tax.
Asset Value
Savings and Investments £600,000
Drawdown Pension’s £350,000
Main Residence £550,000
Rental Properties £1,500,000
Total Net Worth £3,500,000

David and Elizabeth’s Strategic Wealth Plan

After meeting with David and Elizabeth a number of times and conducting a full assessment of their financial circumstances and objectives, we developed a Strategic Wealth Plan to meet their goals.

Investment Management:

  • Taking account of their investment goals and attitudes to investment, we designed a portfolio of investments to achieve a specific level of return while ensuring we took as little risk as possible.
  • We consolidated their investment portfolio’s from many different managers to our Investment Platform for ease of management, and so David and Elizabeth could follow the performance.
  • We manage this portfolio on a regular basis as required by the market factors, and meet with David and Elizabeth twice yearly to discuss its performance.

Income Management:

  • We conducted a review of the current income from pensions and rental property income, and projected forward what their income will likely be for the rest of their lives.
  • We made recommendations of how best to meet their income needs from these sources to ensure they sustained this level of income for life.
  • We reviewed the pension investment strategy and recommended an appropriate strategy to produce the growth required to pay their pension income and sustain this for life.

Estate Planning and Family Wealth Transfer:

  • We assessed that they would have a likely Inheritance Tax Bill on their Estate of £940,000, on the basis of their net worth and gifts they had made to their children.
  • We proposed to move some of their assets into trust for their grandchildren to avoid tax being paid on these assets on death.
  • This was complicated as they required income from some of their rental properties and this would be lost if they transferred the assets into trust, so income planning was vital.
  • After this there was likely to still be around £300,000 tax bill, which would be difficult for their children to fund.
  • We therefore advised they take out a Whole of Life insurance cover to pay their tax bill on death, and removing this burden from their

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