Succession Planning

By Tracy Furminger Girlings Solicitors

The same energy, strategic foresight and planning is required when considering the future on a personal level. However, professionals might underestimate the value of ensuring their personal affairs are in order, procrastinate due to work pressures, or struggle to know where to start.

From a financial planning perspective, professionals often have clear goals, for example, regarding how much wealth they plan to accumulate and then how and when they intend to spend it. However, it is important to plan efficiently, including for any unexpected turn of events. Pensions, for example, are not only a great way to save tax efficiently for retirement, but also work well as a succession planning tool, because they generally fall outside of an estate for inheritance tax and so can be used to cascade wealth down the generations very effectively.

In my experience, contingency plans are often put in place, and regular financial reviews provide the opportunity to make any adjustments to the strategy which could reflect changes in circumstance, legislation or personal goals.

Problems may arise though when decisions can no longer be made personally. So, I always stress the importance of having succession plans in place to ensure one’s wishes continue to be carried through.

A Will is the most obvious place to start, as this not only ensures the estate gets passed to the intended beneficiaries, but also appoints executors who are given the responsibility of administering the estate which makes the process much easier from start to finish. The Will gives instruction to the executors relating to the desired distribution of the assets.

Without a Will the remaining partner, spouse or other close family member does not necessarily automatically benefit from the estate. Intestacy rules determine who

Tracy Furminger Chartered Financial Planner

can administer, and who is entitled to, the assets of the estate and these rarely follow what someone would wish to happen.

The final part is often the piece of the plan that gets left until it is too late. The part that ensures a person’s affairs continue to be dealt with in the event they are unable to make decisions for themselves. A Lasting Power of Attorney (LPA) allows individuals to nominate someone they are sure will make decisions in line with their own wishes when they no longer want to, or are no longer capable, of making those decisions themselves.

Without an LPA in place, if capacity is lost, someone will need to apply to the Court of Protection to become the Deputy. This is a long and complicated process, but once appointed, that Deputy will be the person making all the decisions henceforth.

Succession planning is not only important after death occurs, but essential during a lifetime in the event that capacity to make one’s own decisions is lost.