Handling estates and inheritance – the value of financial advice

Losing a loved one is a traumatic time. As solicitors, you’ll guide hundreds of relatives through the complex, sometimes time-consuming process of arranging probate, and settling the estate.

Not everybody dies with all their affairs in order, or clear instructions on where to find bank accounts, ISAs and life assurance.

Finding out how much money there actually is can take up a lot of time.

At the beginning of probate – how a financial adviser can save time and money

If the deceased already had a financial adviser, your detective work, and that of the family, should be far easier.

“I always say to my clients: ‘die tidy’,” says Rebecca Maxwell-Hyslop, associate partner at Rebecca Maxwell-Hyslop Financial Planning.

“Put your affairs in order, and you’ll save not only your solicitor, but also your children, endless chasing of contacts and hunting down of pots of money squirrelled away.”

“As their financial adviser, I like to have a note of things relating to that person’s financial situation. What insurance policies they have – and with whom. I encourage clients to give me a list of their assets and can certainly help point their executors in the right direction.”

Sometimes, beneficiaries simply aren’t aware of a life assurance plan, or some shares bought years ago – but a good financial adviser will know where everything is.

With the total value of unclaimed inheritances in the UK currently at approximately £15-20 billion (Unclaimed Assets Register, 2024), it’s worth encouraging any client who’s making a will with you to speak to a financial adviser.

Having all the key information and contacts to hand when you’re applying for probate makes everybody’s life easier, when the time comes.

Helping resolve changes to a will – deeds of variation

Not all wills are plain sailing. If a will is contested, and there are difficult conversations to be had, having another professional to support you can be very helpful.

If a St. James’s Place adviser already has a long-standing relationship with a client and their family, that personal relationship may help move things to a successful conclusion.

Many clients don’t realise it’s possible to change how assets are allocated after the death – even if the will is uncontested.

To do this, the beneficiaries will need to execute a deed of variation.

Sometimes a deed is used to include someone in the will who has been overlooked, or ensure all children benefit equally.

It can also help to reduce the amount of inheritance tax due on an estate. Working with a financial adviser in this case can make sure the estate is settled tax-efficiently to make the most of inherited assets.

What to do with the inheritance – handling a lump sum

What to do with the inheritance is one of the biggest financial questions following the death of a loved one. Spend, invest, or pass it on?

This is where expert professional advice, and cash-flow modelling come in.

Cash-flow modelling sounds technical.

Put simply, it’s the way that financial advisers can help clients measure all the assets and liabilities they have, so they can create a long-term financial plan for a comfortable, fulfilling lifestyle as they get older.

“There are always lots of solutions for any pot of money,” says Rebecca.

“Should you pay off the mortgage, put more money into your pension, invest some of it, buy a holiday home? It’s working out the pros and cons of each choice for you personally, depending on your goals, aspirations – and attitude to risk.”

“For example, being mortgage-free is a lot of people's ultimate dream. But when mortgage rates were less than 1% and the stock markets were soaring, was that actually the best place to put your money?”

Taking financial advice can be the key to ensuring your clients get the most out of an inheritance.

The value of financial advice

Financial advice isn’t just about returns.

If someone isn’t used to having much spare cash or savings, trying to decide what to do about the lump sum can cause genuine concern.

Having a financial adviser to explain a client’s choices clearly can help them feel in control and confident in their decisions.

Many people who take financial advice place more value on the personal support surrounding a financial decision than how much money their investments make.

In a recent report into the non-financial value of advice, investors who took advice said they felt more in control, more reassured they were ‘doing the right thing’ and more confident they’d achieve their long term goals.

Working together

When solicitors and financial advisers work together to help clients through the loss of a loved one, it’s a powerful combination.

One that brings peace of mind, even during difficult times. We’d love to talk to members of the Law Society and explore the ways in which we can help each other.

If you’d like to meet a St. James's Place adviser in your area, please do get in touch with us.

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up.

You may get back less than you invested.

SJP approved 2/7/2024