It is remarkable that despite being told that Covid-19 is a killer pandemic – so few people prepare for it – as if death were optional – it is not, it is only a matter of when and how!
I have a friend who is 82 she has stage 4 cancer and was told it was terminal. She and I sat down about six months ago and I explained to her how she could use the spouse relief to save an inheritance tax bill of 40% on her estate which is substantial and to set up a Lasting Power of Attorney for both her health and well-being and financial affairs so that her attorneys could do things for her if she became incapable.
Her children have now come to me, my friend who I will call Margaret, is now on morphine and cannot be said to be of sound mind to implement my advice.
Luckily for them Margaret’s children are of one mind and are willing to enter into a Deed of Variation after their mother’s death to use the spouse exemption and save the tax. However, not all families are able to co-operate, and then the opportunity to plan could be lost.
I have another client who does not live in the UK. He has a significant business owned by a trust which was set up by his father many years ago. He asked me to write a report on the trust and what needed to be done to give him not only asset protection but also control over the investments and distribution to avoid what in this case would inevitably be a family dispute on his death. Because of the nature and circumstances of this case without prior planning it could quickly escalate into lengthy and costly litigation.
He has now had the report for just over two years but has dithered and delayed and now refuses to do anything unless we can first have a face to face meeting – which is now impossible due to the pandemic.
From my experience, family disputes are not uncommon and there needs to be a mechanism in place to resolving such disputes as soon and as fairly as possible if large chunks of the trust fund are not going to be wasted on professional fees and court expenses in trying to resolve it through litigation.
I see regular examples of greed, envy and jealousy when someone dies, and it is ugly. With careful planning most can be avoided, but people seem reluctant to address death and planning– even if death is staring them in the face – preferring to think that death will be postponed until the time is right to plan. But death waits for no-one!
If you want to save taxes on death and these taxes are significant then the sooner planning is done the better. There are still several exemptions and reliefs, but most people prefer to gamble on living – rather than planning now for death.
One would have thought that with a pandemic people would be more realistic about their mortality, but they prefer to plan to stay alive; self-isolate and wear a mask, than to plan for their own demise.
And it is not just fear of the pandemic, which is worrying, there are a host of other equally worrying concerns.
Deaths from cancer could rise significantly due to Covid-19 according to Cancer Research UK. It estimates that three million people have missed cancer screenings.
During the same period, 350,000 people with suspected symptoms have not had the hospital referrals they’d normally have had.
Michelle Mitchell, chief executive of Cancer Research UK said ‘Cancer Services already needed drastic improvement before Covid-19 hit’. The pandemic has ‘made this worse, leaving millions waiting for screening, urgent referrals and treatment’. The problem is not only bad from a hospital capacity perspective with screenings for breast, bowel and cervical cancer paused in the spring, but also people with symptoms are now more reluctant to visit their GP’s for fear of contracting Covid-19.
Philip Barber, consultant respiratory physician in Manchester wrote to the Guardian, that according to an official circular from a large medical group practice, it would now only deal with ‘urgent’ cases, nothing of a routine nature. He goes on to say, ‘What is not clear is how a patient is to know if a symptom is ‘minor’ (what if a tickly cough, for example, is lung cancer?) or how a patient is to know when self-care is ‘appropriate’’.
In my book ‘Reimaging the role of the Private Client Professional’ I draw the analogy between a sick person who can go to a GP for a preliminary assessment, but there is no equivalent in the Private Client Industry. It would now appear, thanks to the pandemic that sick persons are now, in some cases, being deprived of this safeguard for their health as well as their finances.
I go on in my book to say that in the absence of a GP in the Private Client Industry, that we, as Private Client Professionals owe it to our clients to know what the services of other Private Client Professionals are and make referrals as and when necessary. I set up Caroline’s Club to make this easy through podcasts and Client Stories – post lockdown.
The wealth creators, our clients, are the only people who can drag us out of this recession. My vision through Caroline’s Club is that we should work together to assist them in doing so.
If you or a client of yours needs to plan for their succession, please call me on 020 3740 7422 or drop me a line here
And if you would like to join Caroline’s Club, simply register, prepare a podcast and join our Client Stories Zoom meetings here.