Wealth Preserver

The details of the client and the basic assumptions being used for inflation, interest, and model end date.

The table gives a brief description of each event e.g. retirement expenditure. It then shows the cumulative total of each event that will be received between now and the model end date. Some people will find it surprising just how large these figures will be and begin to realise the need for planning. The table then goes on to show the year by year breakdown and totals.

This forecast represents what a retiring couples future might look like if they have taken prudent planning action throughout their lives. The model shows the inflows of capital sums from investment bonds, endowments, pension tax free cash and pension income. It then sets against this the outflows for the income required to maintain the clients required standard of living in retirement. Capital expenditure items can also be factored in such as deposits for children’s houses, education costs for grand children or large one off purchases such as boats or holiday homes.

The graph below shows the projected readily realisable capital position (spendable assets not property) for the client going forward. This forecast shows that this client will in fact be spending less than they are receiving throughout their retirement and as a result they become progressively more and more wealthy in real terms (after inflationary effects) leading to a rise in the value of their estate.

The forecast shows that these clients will have total assets (excluding property) of approximately £2.2Million by age 90. This means that if action is not taken a large proportion of the clients estate will end up going to the exchequer in inheritance tax and possibly the local authority for long term care costs. The work required for this client will involve wealth preservation strategies to ensure that the hard earned family assets can cascade down through the generations avoiding the caustic effect of both inheritance tax and care fees.

The strategies to achieve this could involve ensuring that the estate is correctly split from the outset, the use of annual allowances, trusts, Potentially Exempt Transfers, gifting from income, insurance and correctly drafted wills. By the correct implementation of some of these strategies we can also ensure that proportions of the family wealth cannot be acquired by the local authority to pay for long term care fees should they arise. This leaves the client in control of their accumulated wealth and not the local council.