Mary was a 67-year-old divorcee. She had retired from paid work and volunteered for a local charity. She had two daughters, both married with children.
As the granddaughter of a wealthy stockbroker, she had more money than most of her friends but envied their lifestyle. She lived alone in a home that she owned. Her late grandfather's firm managed her significant assets.
Although she was comfortable, she wanted to live a fuller and more purpose-driven life.
“Although Mary was comfortable, she wanted to live a fuller and more purpose-driven life.”
Mary was keen to ensure that she didn't outlive her capital, but she also wanted to leave a legacy for her children and grandchildren. She also wanted to make substantial gifts to charity.
She'd been working with a financial adviser for several months. The adviser had suggested setting up a trust fund from which she could take her income, with the money passing to her beneficiaries on her death.
But Mary felt frustrated. The trust application entailed medical underwriting, which she found invasive, and the process was dragging on.
She was happy with her current level income, and what she really wanted was to see her children and grandchildren benefiting while she was alive and and when they needed the money most.
The first step was to listen to Mary’s concerns in detail, and to establish what her priorities were.
It became clear from those discussions that she wanted much greater clarity about her financial situation. She needed a plan she felt comfortable with, so she knew exactly how much she could give to her family and to charity without running out of money.
In collaboration with her planner, and with additional input from a regulated financial adviser, Mary developed an actionable plan that aligned with her values and goals and enabled her to live the life she wanted.
“Mary was pleasantly surprised to discover that she was able to enjoy a better lifestyle.”
Between them, Mary and her planner produced a lifetime cash flow forecast, with provisions for a range of different scenarios.
She dispensed with the invasive medical questions and examinations and arranged instead for the trust to make discretional gifts to her family — for example, to help put her grandchildren through school and university.
The trust assets were held in a lifetime bond to ease tax reporting, with investments managed by her stockbroker.
Her planner also helped her to draw up a giving plan, ensuring that she fully utilised her nil rate tax band, so there was no tax to pay.
Mary was pleasantly surprised to discover that she was able to enjoy a better lifestyle, safe in the knowledge that, whatever happened, she had sufficient assets not to outlive her capital.
All this has enabled Mary to enjoy life to the full and give peace of mind to three generations of the family.
Please note, Second Life Financial Planning provides expert financial guidance, not regulated financial advice. We refer clients requiring advice on specific financial products to firms, authorised by the Financial Conduct Authority, that share our evidence-based investment philosophy.