Generic Financial Planning – Fact Sheet

Our service

With over 20 years of expertise, we provide detailed strategic advice on all aspects of personal and business financial planning. This service is not regulated by the Financial Conduct Authority.

What we offer

Our financial planning service will help you to make strategic decisions with your assets and focuses on:

  • Financial planning for your business
  • Personal financial planning
  • Property investments (buy-to-let)

How we work

Unlike many of our other products, our financial planning service is not regulated by the Financial Conduct Authority.

Clients benefit from over 20 years of expertise and we charge a set fee for our advice

The benefits

Looking ahead and getting your finances in order is paramount – whether it’s your personal finances or your business, the benefits are significant.

  • Set clear financial goals
  • Develop a debt to cash strategy
  • Access expert advice built up over two decades
  • Identify opportunities and solutions for YOU.

What next?

If you think we could help contact Reeves Independent on 0191 281 9862 or email info@reevesifa.com for a FREE introductory chat! 

 

One Life – Fact Sheet

One Life – Fact Sheet

Our service

Ill health and death are a sad but inevitable part of life and often strike with little warning. When this happens, without carefully laid plans, the financial impact on individuals,

families and businesses can be significant. Through our One Life service we aim to help

you understand these issues and mitigate the effects.

What we offer

The Reeves Independent One Life service will help you to:

  • Review any current protection – life assurance
  • Analyse your needs – is your current protection suitable?
  • Provide bespoke recommendations for you and your family
  • Provide a re-brokering service if needed
  • Implement agreed actions with you
  • Liaise with any policy providers
  • Deliver suitability reports
  • Provide a full administrative service and regular email updates direct to you

How we work

We follow a clear path with all of clients to ensure that we only ever provide advice that you need and that our services and fees are transparent.

  • Step 1: Introductory chat to discuss your situation
  • Step 2: Review your current protection – with your permission
  • Step 3: Analyse your current + future needs to check your cover is suitable
  • Step 4: Offer our recommendations; discuss the next step and any fees*.

*You have the option not to proceed at any point until here.

The benefits

Planning ahead offers numerous benefits for both you and your family to give you the peace of mind that, should the worst happen, your family are well protected. Taking action now while you are fit and healthy will also ensure you get the:

  • Best protection you can get
  • Save you money
  • And can IMPROVE the terms of your protection.

What next?

If you think we could help contact Reeves Independent on 0191 281 9862 or email info@reevesifa.com for a FREE introductory chat! 

 

The importance of reviewing your financial plans

Nigel Reeves, from Reeves Independent, looks at why it pays to review your options no matter who you are.

As a financial advisor for more than 20 years, I’ve lost count of the number of times I’ve stressed the importance of reviewing financial plans. Even if you think everything is in order it pays to get a second opinion.

This is sound advice – and something I’ve stressed thousands of times over the years – but even now it’s still worth repeating and particularly so in light of some recent work undertaken by the Reeves Independent team inNewcastle.

Some months ago, we were introduced to a high flier – someone who had worked as a CEO for a major financial organisation in the city for many years and, now in his fifties, was increasingly thinking of the future and retirement and beyond.

Based on the background of the client in question, it was fair to assume that his financial planning would be watertight and there would be little to do but to provide reassurances that this was the case. However, after an initial meeting, and a full review of his financial position we discovered this was not the case.

At the outset our client was already drawing his pension so we used our retirement planning service to carry out a comprehensive assessment of this and the rest of his assets.

From this we were able to identify a major gap in his financial planning around the impact his death would have on his family. The major problem being that he had lost significant ‘death in service’ benefits from his employer – leaving a potential issue for his family on his death

Whilst our client had already written a will and made plans for his estate, the relevant documents were not up to date. They would not have adequately provided for his partner (aged 50) or fully protected his estate – worth around £2.5million – from threats such as Inheritance Tax (IHT) and Care Fees.

In order remedy this, we have now put in place two new wills for him and his partner, set up the necessary trusts and put in place deeds of severance to help mitigate the impacts of IHT.

As part of the review, we also identified that his life insurance cover was not as comprehensive as it could have been. After looking at various options, we were able to rebroke his existing cover, saving him money on his existing policies as well as improving the cover for him and his family with a ‘whole of life’ policy including family benefit over a level term.

Having successfully helped the client with our One Life services (Wills and Estate planning and life insurance) we are now looking at both his and his partner’s pension plans. He is already drawing benefits from one pension but has significant benefits in others and we have provided recommendations on the best way and time to use these to match his individual retirement plans.

The moral of the story is that no matter who you are or what position you are in it pays to review your finances and get a second opinion. Our client thought his finances were all in order but in the end he certainly benefited from our advice.

For high earners and high fliers this is particularly important when approaching retirement. You can be earning serious sums of money during your working career but if you are not prepared for the future it can leave a big hole in your finances when it eventually ends.

If you want to review any aspect of your finances, please contact Reeves Independent on 0191 281 9862 or email liam@reevesifa.com.

We provide a full range of bespoke services including: portfolio management; financial planning; pension consolidation; retirement options; pension boost; retirement planning; corporate service; tax returns and wills & estate planning; mortgages and buildings and contents insurance.

Trusts and Trustees

Trusts and trustees: what it means to be chosen as a trustee?

What is a trust?

In simple terms, a trust is a legal arrangement that enables property within the trust (money, assets, investments, property for example) to be held in ‘trust’ for the benefit of another person or group of people (beneficiaries) until a specific time.

The cash and investments held in the trust are also called the ‘capital’ or ‘fund’ of the trust. This capital (or fund) may produce income, such as interest or dividends. The land and buildings may produce rental income. The way income is taxed depends on the type of trust.

When is a trust set up?

A trust can be created under the terms of a will, when someone leaves instructions that when he or she dies some or all of the estate is to be placed in trust.

The person who sets up the trust is known as a ‘settlor’ and he or she chooses people to run the trust for its beneficiaries. Those people in charge of the trust are its ‘trustees.

What is a ‘trustee’?

Trustees are the legal owners of the trust property. They are legally bound to look after the property of the trust in a particular way and for a particular purpose. Trustees administer the trust and in certain circumstances make decisions about how the property in the trust is to be used.

The trust can continue even though the trustees might change, but there must normally be at least one trustee.

What is a ‘beneficiary’?

A beneficiary is anyone who benefits from the property held in the trust. There can be one or more beneficiaries, such as a whole family or a class of people, and each may benefit from the trust in a different way.

For example, a beneficiary may benefit from:

• the income only, or

• the capital only, or

• both the income and capital of the trust

What are the responsibilities of the trustees?

The responsibilities depend on the type of trust and the terms under which the trust is created. The ‘Settlor’ may have given instructions that trustees carry out various functions, and trust law may impose further obligations.

For taxation purposes responsibilities may include:

• Notifying the Inland Revenue that tax is due, within six months of the end of the tax year, where you have not received a tax return for the year

• Keeping records of the income and capital gains

• Completing and sending back any tax return issued to you

• Paying any tax due on the income or capital gains of the trust

• Supplying certificates to the beneficiaries to show how much income they have received from the trust in the tax year and how much tax the trustees have deducted.

Depending on the terms of the trust deed, trustees can appoint a professional adviser, such as a solicitor or accountant, to carry out some or all of these tasks. However, trustees are still responsible for ensuring that all tax obligations are carried out satisfactorily.

What happens when a trust ceases to exist?

If a trust is wound up, Trustees should notify the Inland Revenue and complete a tax return for the period up to the date the trust is wound up.

Remember, trustees will need to

• Make provision for any tax that may be due

• Consider capital gains tax liability.

If the property of the trust is distributed before any outstanding tax is paid then trustees might have to pay that tax out of their own pockets.

ENDS

 

 

The importance of witnesses in a last will and testament

The role of a witness in making a last will and testament

Once a will has been drawn up, it is not effective until it has been signed in the presence of two witnesses. Being a witness is a very important role and involves a range of responsibilities.

The role of the witness

The concept of witnessing is designed to ensure that the testator (the person making the will) has not been co-opted into signing the document. It is also to safeguard against the possibility of the will having being created without the knowledge of the individual whose estate is in question.

Witnesses should be trustworthy and close to the person making the will. However, becoming a witness precludes the individual in question from also being a beneficiary, which can pose problems when a testator is choosing who to nominate.

There are other fairly strict rules regarding the circumstances in which witnesses must perform their duties. The most important of these is that witnesses must sign the document on the same occasion as that of the testator to guarantee the testator has acted in their own free will.

The role of the witnesses is vital to the validity of a will. As such, a witness must take his or her duties seriously.

Rules that must be followed by witnesses

In order to make sure that the Will is signed and witnessed in the correct manner it’s important that:

• Two adult witnesses are present in the same room before the signing

• Both witnesses must be eighteen years old or over

• The will maker signs first followed by each witness

• Witnesses are traceable on the will writer’s death

• A witness is capable of understanding what he or she is doing

• Witnesses are not beneficiaries of the Will

• Each witness signs with his/her usual signature, followed by his/her printed name, address and occupation.

• No one leaves the room before the signing is complete.

What it means to be a Guardian

What is a Guardian?

A guardian is an individual who is given the responsibility – in someone’s last will and testament – of looking after his or her child/children in the event of their death.

Who can be a Guardian?

The normal choice is to appoint family members, particularly where very young children are involved. As children grow the appointment of friends may be more appropriate as they are more likely to share your lifestyle and in these modern times live nearer than your family.

It is usual (but not essential) that the same persons are appointed guardians of all the testator’s minor children. When the guardians are to act only after the death of the surviving parent it is desirable that each parent should appoint the same persons to act as guardian.

What must a Guardian do?

The duties of a guardian are essentially the same as those of a parent. If the worst happens, a guardian is responsible for the day-to-day upbringing of the child or children.

This includes being responsible for their care, health and general well-being – everyday things we take for granted. This obviously includes feeding and clothing them, ensuring that their education and current standard of education is maintained.

Guidance is a huge factor in the upbringing of any child, and the person or persons entrusted must be able to do this.

How are you chosen as a Guardian?

Guardians are appointed through someone’s last will and testament. Within the will, the testator will include as much detail as possible as to why they want the designated Guardians to take on the role of looking after their children.

This is something that requires a lot of contemplation and discussion before a decision is reached – and the person writing the will must discuss this extensively with prospective Guardians to ensure all parties are happy.

Once a decision has been reached and the last will and testament has been drafted it is important the person(s) chosen as Guardians do not sign the will as a witness. This is what is known as a ‘conflict of interest’ and as such can lead to the will being contested.

If you are chosen as a Guardian when can this happen?

Assuming that either parent has the power to appoint a guardian or guardians on their death, it is usual for such appointments to take effect on the death of the second parent.

What are the implications of being a Guardian?

The role of the guardian is a very responsible one. There will be financial, social and emotional implications taking on such a vast role and the matter should be discussed in detail between the Testator and the appointed guardians.

Many parents will provide financial support for their children in the event of their death and although it may seem insensitive to question them about this, it is a factor in making your decision.

You may be able to claim child benefit and receive a guardian’s allowance in the event that both parents are deceased. Where one parent is alive and you are still called upon to act as guardian the situation will obviously be more complicated.

ENDS

The role of an executor in a last will and testament

What it means to be named as an executor in someone’s will?

Being named as an executor in someone’s will is an important role. But what exactly does it involve? Here, we outline the key duties to help anyone who is asked to do this.

Those inheriting from a will (the beneficiaries) do not immediately own the estate on the will writer’s death. Ownership passes first to the executor – who has the task of administering the estate and winding up the affairs of the deceased.

What are the main duties?

The role of the executor is very important and taken very seriously in law and the executor must carry out the role with ‘due diligence’. The law expects executors to

• Put the interests of beneficiaries before their own

• Not make a profit from the position unless authorised

• Scrupulously account to the beneficiaries for all the money

• Act reasonably and prudently in relation to the estate.

First steps

The first job is arranging the funeral, although in practice this role is usually dealt with by the family.

The estate must also be valued and this can include:

• Entering and securing the property (if left empty)

• Taking any valuables into safekeeping

• Making a full inventory of all the property and possessions

• Arranging for all property and possessions to be valued

• Listing and collecting paperwork on all the person’s financial affairs.

Probate

When the valuation of the estate is complete, the next step is to make the necessary application for probate by sending off the correct papers to court. Probate simply means proof that the will is valid and is a document that can be shown to anyone who wants proof that you have been authorised to act as executor.   Executors must swear an oath – a formal confirmation that you are entitled to probate and will do the job properly. It also states how much the estate is worth.

Administering the estate

This is where the financial affairs of the deceased are finalised including:

• Transferring or cashing in any investments

• Settling any unpaid debts

• Arranging to sell any property or possessions that are unwanted

• Paying out legacies

• When the overall financial picture is clear – reviewing the tax position to see if any adjustments needed.

Distributing the assets

The next step involves arranging the transfer of the assets to those who are entitled to them. This is often done by us – the IFA – or a solicitor.

How long does this take?

The process can be completed quite quickly but it can take longer and, in the worst cases, drag on for years. However, if the will is clear and up-to-date with accurate details of property and beneficiaries, then winding up could be completed in as little as a matter of months.

Can executors be beneficiaries?

Yes, it’s possible to be both. For instance, a wife can appoint her husband and vice versa. If you are in a dual role, you need to be clear on your roles and the first duty is as executor. You will therefore need to act in the interests of the estate and not put your own first.

Does an executor have to act?

No, there is a choice and this is called ‘renouncing’ – and it’s advisable to do this at the outset. Once administration starts you cannot drop out if you have a change of mind. You could choose to retire for a reason such as ‘ill health’.

 

 

Does it make sense to consolidate your pensions?

Have you accumulated multiple pensions through your working career?

If the answer is yes – and this applies to many people working today – it can be difficult to keep track of how each one is performing.

The danger is that you forget about old plans and your money ends up sitting in expensive, poorly performing funds.

In these circumstances, you might benefit from transferring your pensions into one easy-to-manage fund.

Is it time to consolidate then?

The benefits of consolidating your pensions if you move from job-to-job can be significant – particularly where success or failure depends on the performance of your investments.

Besides the logistical benefits, consolidating your pensions can give you the opportunity to access a greater choice of funds – and ideally better performing ones.

And the impact of high fund charges and poor fund performance shouldn’t be underestimated. For example:

• Someone with a £10,000 fund invested for 30 years that achieves annual growth of 5% and a charge of 2% will have a pot worth £23,000.

• The same money invested in a fund achieving 7% growth and having a charge of only 1.5% will be worth more than double (£48,000).

Therefore, while a better return can never be guaranteed, if you can achieve a greater investment choice and lower fees by consolidating your pensions, it’s certainly worth considering.

Get some advice

However, while switching pensions offers potential benefits, it’s important to seek advice before doing so.

It’s important to consider what type of pensions you have and how close you are to retirement. Issues such as exit penalties or fees all need to be considered and have a bigger impact the closer to retirement.

That said, if you’re unhappy with your current arrangement s, and your funds are letting you down, it can make sense to consolidate. You may still have 10 or 15 years to retirement and the benefits of transferring now are that you have all of your money in place for the purposes of buying an annuity.

For advice on switching your pensions, please contact Reeves Independent for a discussion on your options.

You can contact us on: 0871 271 1280.

The benefits of financial planning

Do you think about where your money is going or do you spend what you have with little direction?

Whatever your goals – whether it’s to guarantee long-term security or you’re looking to maintain a particular lifestyle – having a financial plan in place will certainly help.

Financial Planning is a vital process and something we advise all of our clients to do. Being financially independent will give you greater control over what you do and when. Here are our top tips to help you with this.

1) Start as soon as you can. Your investments or savings will have longer to benefit from compound interest.

2) Starting earlier will also enable you to take more ‘investment risks’ to generate better returns – therefore costing you less money overall.

3) At the moment, the value of any cash you hold is being reduced by inflation.

4) Over a long period of time, you can also afford periods of poor returns or below average earnings – which is more difficult to absorb over a shorter timescale.

5) You’re much more likely to be able to cover the impact of unexpected problems such as unemployment or long term illness this way.

6) The same is true of other costs and charges – such as the cost of care home fees in later life.

7) It may also enable you to build up surplus assets to enjoy beyond those you need which may allow you to stop working earlier.

8) Planning ahead pays – you may not receive the inheritance you are planning on.

9) There’s also no guarantee you will be able to release the capital you need from your home later in life when you downsize to meet your costs.

10) Annuity rates are also falling. Your current pension planning may not provide the income in retirement you expect.

Besides all of the above reasons, having a financial plan in place also gives you targets and goals to aim which, otherwise, you might notachieve. Reeves Independent works with clients to help them plan ahead and achieve these targets. If you need any help, please get in touch on 0871 271 1280.

 

Trusts explained: the role of trusts in estate planning

When it comes to estate planning, most people understand the need for a will even if they put off writing one (over 50 per cent of the population in fact). Unfortunately, this is less true about another important estate planning tool: trusts.

While most people have heard of ‘trusts’, the role they play in the estate planning process is less understood. Trusts can seem complex but here we explain their role, how they work, what type of trusts there are and the benefits they offer as part of your estate planning.

What is a trust?

In simple terms, a trust is a legal arrangement that enables property within the trust (money, assets, investments, property for example) to be held in ‘trust’ for the benefit of another person or group of people (beneficiaries) until a specific time.

The person who sets up the trust is known as a ‘settlor’ and he or she chooses people to run the trust for its beneficiaries. Those people in charge of the trust are its ‘trustees.

Why set-up a trust?

You have a choice whether to pass on your assets directly to your beneficiaries (absolutely) through your will or use your will to create a trust or trusts which hold property on their behalf.

When assets are given absolutely they enter the beneficiary’s estate and are immediately at risk from future claimants, creditors and taxation. When you set up a trust this is not the case.

What are the benefits of setting up a trust?

There are multiple benefits of setting up a trust, as we have hinted, the main one being you are able to protect your property and control very clearly how and when your assets are passed onto your loved ones such as your spouse, children, and future generations

The ‘property’ of the trust remains within the trust rather than the estate of any one individual so trusts can be used strategically to:

1) Mitigate the impact of taxes (primarily inheritance tax) and other costs such as possible care fees or even bankruptcy   2) Ensure that you have greater control on the inheritance of your assets so that they go to the people you want. For instance, have you considered what happens if your spouse remarries? How would this affect your own children if he/she later changed their will in favour of the new spouse and any subsequent children?

Or for those who already have children from a previous marriage how do you ensure that they would get their fair share? There may also be a business you have worked to build up. Surely you would want to protect this for your family too? Using trusts allows you to do this and protect your estate from future claims that prevent it going to who you want it to.

3) Writing trusts also keeps your estate out of probate. Trusts are exempt from probate – unlike a will – which undoubtedly saves time and money and make things easier in the long run.

What types of trusts are there?

There are several different types of trusts and various mechanisms for passing on the property of these trusts to beneficiaries. Some of the main options are:

Bare trust: this is the simplest form of trust. Although the trust is held in the name of a trustee, the beneficiaries have an absolute right to the property of the trust and the trustee has no discretion over what the beneficiary gets.

Interest in possession: this exists when a beneficiary has a ‘current’ legal right to income from the trust. Often they will have no right over the capital of the trust. Usually the trust capital will pass to a different beneficiary in future.

Discretionary or accumulation: A discretionary trust is where the trustees have discretion about how the income from the trust is used. They may be required to use the income to benefit particular beneficiaries but will have to decide how much is paid, how often and what conditions are attached. In an accumulation trust, the trustees have the option to accumulate income in the trust – adding to the trust’s capital. The accumulated income becomes part of the trust. They will often do this until the beneficiary becomes entitled to the assets or the income produced from the assets. How important is the role of the trustees? It’s very important. Trustees are the legal owners of the trust property. They are legally bound to look after the property of the trust in a particular way and for a particular purpose. Trustees administer the trust and in certain circumstances make decisions about how the property in the trust is to be used. The trust can continue even though the trustees might change, but there must normally be at least one trustee. We will advise you on how you go about appointing your trustees. How is a trust set-up?

A wide range of trusts exist and they are created by deed or used in conjunction with a will to protect and control the inheritance of assets and assist bloodline planning.

However, trusts can choose to distribute property at anytime – as soon as a trust is written, at death or at a distant time in future after the death of the first beneficiaries.