The following case studies are examples of how we have assisted our clients. Please note however that the circumstances mentioned are specific to those particular clients referred to within each case study and therefore we always recommend that you seek financial advice relevant to your own specific circumstances before embarking on any course of action.
I thought I would be better off dead
March 2016 one of our clients had a heart attack and as you would expect his life was turned upside down. From being a very fit manual worker he was now propped up in a hospital bed worrying about the family’s future, with the bread winner facing a long spell before returning, if ever to his previous employment. Hence, him thinking the family would have been better off with him dead and the life assurance he had in place paying out. His wife could hardly contain her excitement when I reminded her that not only had we arranged life assurance but we had given them Critcal Illness cover that would pay a lump sum equal to one years salary plus we had arranged Health Insurance to cover the mortgage payments for 12 months or until he went back to work which ever was the sooner. When you have just had a Heart Attack the last thing you need is stress, that’s just one of our functions, removing stress by providing sensible solutions.
Sometimes it IS all about the money
Back in November 2000 we arranged a decreasing mortgage and life assurance with critical illness for a young couple. Despite many attempts to arrange an appointment to review their circumstances and the appropriateness of our advice, they felt their circumstances hadn’t changed and did not require a review with us.
In November 2015 the insurance company contacted them to confirm that their cover was due to expire in December 2015, this prompted them to contact us to arrange further cover for their outstanding mortgage balance, as they had extended their mortgage without telling us.
During our discussions it was discovered that in 2006 the lady had in fact been diagnosed with breast cancer, which is an event that would have resulted in a claim that would have paid out the then sum assured, sufficient to pay off the outstanding mortgage , thereby saving them:
• 108 monthly mortgage payments of £200.00 which equals £21,600.00
• 108 monthly Insurance payments of £14.26 which equals £ 1,540.08
• Using their savings to replace lost income
• Additional stress at an already distressing time
In February 2012 the male assured had chest pains which were diagnosed as Angina and resulted in him being fitted with 3 stents, which again was a claimable event under the rules of the policy.
The rules of the policy were a claim should be made within 3 months of diagnosis which clearly they had missed and the insurance company would be within their legal rights to pay out the current sum of £3000.00 well short of their outstanding mortgage balance.
Whilst we understand the insurance company’s legal rights we feel that they have a moral obligation to the client, a case that we are currently fighting on their behalf.
Result: Here is the News we have been waiting for, after months of negotiation the insurers have today transferred £26,535.40 into the clients account THIS TIME IT WAS ALL ABOUT THE MONEY & having an advisor acting on your behalf.
Sometimes its NOT all about the money
In 2010 this 44 year old client was referred to us from his solicitor who was handling his late uncle’s estate that had been left to the client. Shortly after this he lost both his parents with whom he lived, needless to say these events left him in a distressed state. In conjunction with his solicitor we proceeded to assemble all the funds into one area whilst we engaged with the client as to his aims and future goals.
Although he was happy living in the old family home the neighbourhood began being targeted by gangs harassing residents into having unnecessary jobs carried out on their properties and demanding large cash sums to do them, we assisted in this by asking that all jobs be paid from the funds we handled for the client which deterred all but genuine tradesmen. To add to clients problems he was made redundant from a job that he enjoyed.
Following lengthy discussions it was agreed that the best course of action was to sell up and move closer to a relative who lived in a small market town and start life afresh but be close enough to meet up with his friends.
Using our software and some clever financial planning we got to the point where after buying his new house, a modest new car and a little dog for company there were enough funds for him never to have to work again unless he wanted to and live the life he wanted away from the stressful situations he had found himself in previously.
Result: a gentleman who was beset by problems not of his making is now living a much more happy and relaxed life and working part time as and when he wants to. His Dog is a very happy dog and keeps our client company 24 hours a day.
Business Owner, Wanting to Sell Up & Retire
This couple came to us as an introduction from his accountant, he owned a business that he wanted to sell & retire but no one had made an offer in the 3 years it had been on the market. His wife worked for an insurance company and had her own pension and had failing health.
We had an in depth discussion with the client and his accountant and gathered details of all assets, incomes, and liabilities. We also wrote to his wife’s employer to get full details of her various pension plans so we could make appropriate recommendations.
Once we had input the information on to our Lifestyle planning software we worked out that he didn’t need to sell the company to retire and live the lifestyle he wanted. What we proposed was that he appointed his two top employees as directors to run the company, which was a great start for them, he could take dividends if cash was available and charge the company rental for the unit, which he owned. We reorganised his bank and building society accounts to get higher interest and some into more tax efficient investments, arranged his wife’s pension to release maximum tax free cash and income as he did not rely on this to live the lifestyle they desired. His pension was left for future release of funds as and when required.
Result: They still own 75% of the business, saved on agent’s fees by not selling and they are safe in the knowledge that they can continue to live the lifestyle they want without the fear of ever running out of money and regularly take cruises as a way of enjoying the fruits of their labours.
To Live the Dream
“This Lady initially came to us in 1974 for a mortgage and ended up living the dream.”
This lady was a very high powered executive who typically had little time for herself and was worried that she had always lived in at the hotel and needed her own base near the shops, which turned out to be Harrods & Harvey Nichols. We arranged the unthinkable, a mortgage that was 9 times her income, but was well within her budget because of the various perks she derived.
So happy was she with what we had managed for her she asked us if we could work out a plan for her to retire to a villa in Marbella, where she took regular breaks to get away from the stresses of the job. It was agreed that Pension employer contributions were a tax efficient way of saving towards the goal together with Unit Trusts which were Capital gains tax liable and not normally Income tax liable, this was the correct way as she was unlikely to pay Capital gains tax but would be more likely to paying Income Tax.
By the mid Nineties the London Property market had grown to the extent that she could sell her property near the shops and buy a villa outright in Puerto Banus this we helped arrange for her. The pension & regular savings were sufficient that she could retire to live the dream in the sunshine and still have her shopping expeditions albeit not to Harrods but the shops in Puerto Banus and Marbella are very nice I am told.
Result: one very happy lady who has a constant stream of visitors, including myself, to stay and help her enjoy living the dream.
“What Can We Do to Make Our Estate More Tax Efficient?”
Client had sold his business and purchased a property portfolio. He and his wife were higher rate tax payers. Her parents had recently died and he was worried about Inheritance Tax when his parents died as he was the sole beneficiary.
Our initial findings found that 7 of the properties were in his father’s name and 1 in his mothers. His main residence was in his name and the additional 5 properties from the portfolio. When his parents passed away he would be paying Inheritance Tax at 40% on the properties in his parents’ name, so in essence he was paying to inherit the properties he had already bought. His mother’s and wife’s estate would be below the Inheritance Tax threshold so tax allowances were not being used efficiently.
We assessed savings, investments, pensions and the property portfolio for tax and Inheritance Tax efficiency as well as income and access to funds for planned expenditure and any additional short term needs as well as make use of any tax allowances from Isa’s.
The pension review showed his wife had a defined benefit scheme that would be fully funded at retirement. He had a small pension that was not considered to be his main funding for retirement but we recommended that additional maximum tax efficient contributions be made from the rental income he received.
A solicitor was utilised to draw up change of ownership of the properties in his parents name so he and both his parents were co-owners. This meant that when his parents died he would become the sole owner of his properties, and also utilising 3 income tax and Capital Gains Tax allowances each year reducing the annual liabilities.
His main residence and rental properties were put into joint ownership with his wife utilising further Capital Gains Tax and Inheritance Tax allowances. Their pension plans now have nominated beneficiaries so putting these outside their estate on death. He and his wife had large net disposable income, so savings into isa’s and pensions were set up for their children’s benefit.
Result: The possibility of paying Inheritance Tax, Capital Gains Tax and Income tax is greatly reduced if not totally eliminated, future planning will be undertaken when the children reach 18 to continue tax efficiency. Everything that is currently in place is review annually.
