If possible, it is a good idea to start this conversation with beneficiaries before probate has been granted.
This gives beneficiaries more time to assess their options and reduces the risk that they will miss out on potential benefits because they didn’t know about them.
The key areas where beneficiaries might need support include:
- Accessing investments. Providing liquidity, setting up withdrawals or making a sale.
- Isa rules for spouses. Beneficiaries may be able to benefit from the latest Isa rules for deceased estates, which they might be unfamiliar with.
- Multiple beneficiaries. If there is more than one beneficiary, you can play a key role in helping each party work towards their objectives.
- Trusts. It may be in the best interests of the beneficiaries to settle any assets held by the deceased into a trust. Trusts can be complex and it’s likely that beneficiaries will need your guidance to do this correctly.
- BPR-qualifying shares. If the beneficiary inherits any BPR-qualifying shares, there could be significant tax benefits to retaining the shares rather than selling them. You can add a lot of value to the beneficiaries when it comes to their options, in particular if you were the professional, who originally advised on this investment.
Building a relationship with a client’s beneficiaries early on can have a direct and positive impact on planning outcomes.
It is also a great opportunity for you to provide advice to the next generation and keep assets under management.
After all, beneficiaries are much more likely to come to you for advice if you have already established a good relationship with them.
Over the next 30 years, an estimated £5.5 trillion is due to be passed between generations in the UK.
And as things stand, the bulk of those transfers will involve beneficiaries who are not currently advised.
Advisers need to be proactive
Be proactive, and ready to step in quickly when your client passes away.
Solicitors and executors will not automatically think to involve the financial adviser when a client passes away.
Advisers need to be proactive to make sure they are in the conversation and so able to contribute their expertise.
That starts by making sure you have relevant contact details on file.
Some firms are better than others at this. It is a good idea to have details for a client’s solicitor, as well as any beneficiaries who are likely to act as executors.
Ultimately, the best time to get these details and start building a relationship with beneficiaries is while the client is alive.
If the unexpected were to happen, they know who to turn to.
Having a process in place
Above all, a good adviser can be a source of enormous reassurance to a client’s family when the client passes away.
Having a defined process that kicks in at this point helps to deliver that.
As an example, some advisers have a letter they send to a client’s spouse containing helpful contact numbers, including their own.
They will then meet with the spouse, sometimes along with another family member, so they know that the financial side of things is covered and they have someone at the end of the phone who will answer all their questions.
If you do not have a process in place for when a client passes away, now is the time to do it.
Ben Charrington is head of estates and probate at Octopus Investments