At GP Norgate Estate Planning, we were recently approached by a couple in their 70s and 60s who had built a successful life together. Over the years, they had grown a thriving family business, acquired several investment properties, and maintained a strong investment portfolio. With two adult children and a new grandchild, they began to think seriously about how best to pass on their wealth in a way that was secure, fair, and tax-efficient.
Their key concerns were clear:
- Inheritance Tax – With an estate valued well over £10 million, they were far above the inheritance tax thresholds. They knew a significant tax burden would fall on the family without careful planning.
- Control and Flexibility – They wanted to make sure wealth was distributed responsibly, particularly as one child had previously struggled with money management.
- Safeguarding the Family Wealth – They were keen to protect assets against risks such as divorce, creditors, or poor financial decisions, ensuring wealth would last for future generations.
With these challenges in mind, we worked with them to design a multi-layered estate planning strategy built around different trust structures and tailored solutions for each family member.
Step 1: A Bare Trust for the Grandchild
The couple’s first grandchild had just arrived, and they wanted to make sure her future education was provided for. We advised them to create a Bare Trust, into which they placed £100,000.
This simple structure ensures:
- Funds grow tax-efficiently, taxed at the child’s personal rate.
- The grandchild gains full access at age 18.
- Peace of mind that funds will be available for university and key life milestones.
Importantly, this gift is treated as a Potentially Exempt Transfer (PET). Provided the couple survive seven years, it falls outside of their estate for inheritance tax purposes.
Step 2: A Life Interest Trust for the Surviving Spouse
Although both were in good health, the older spouse wanted to ensure that their partner would have a reliable income should they pass away first. We recommended a Life Interest Trust within their Will to hold their share of the investment properties.
- The surviving spouse receives all rental income for life.
- Capital is preserved for the children after their death.
- The arrangement helps reduce the eventual inheritance tax burden while potentially protecting against other risks such as care fees.
Step 3: A Discretionary Trust for Their Son
One of their children had a history of impulsive financial decisions, including gambling. To protect his share of inheritance, the couple set up a Discretionary Trust with £1 million.
- Trustees (initially the parents, later trusted friends) decide how and when funds are released.
- Funds can support important life goals (education, housing, or hardship) without the risk of being squandered.
- The trust also shields the inheritance from creditors, divorce settlements, or poor financial judgement.
While this type of trust attracts an immediate inheritance tax charge of 20% (as it exceeds the nil-rate band), the parents felt it was a price worth paying for peace of mind and long-term security.
Step 4: An Accumulation & Maintenance Trust for Future Generations
To benefit not just their children but also grandchildren and great-grandchildren, we helped setting up an Accumulation & Maintenance Trust with £500,000.
- Funds can grow in trust until beneficiaries reach age 25.
- Trustees can use funds to support education or development needs.
- The trust runs for up to 125 years, ensuring wealth can cascade through the family.
Step 5: A Trust for Life Insurance
Both clients held substantial life insurance policies. Without planning, the payouts would have fallen into their estates, adding to the taxable value.
We advised them to speak with their life insurers, to set up a free Life Insurance Trust, to receive the life insurance proceeds. This ensured:
- Policy proceeds are kept outside the estate.
- 40% inheritance tax on the payout is avoided.
- Trustees can release funds quickly to family, bypassing probate delays.
Step 6: A Business Property Relief (BPR) Trust
The family business, valued at around £3 million, was central to their wealth. Fortunately, certain business assets qualify for Business Property Relief (BPR), which can reduce inheritance tax by up to 100%.
We arranged for a BPR Trust through their Wills so that, upon the second death:
- Eligible business assets could be transferred into the trust.
- Relief could be claimed (100% up to £1 million, then 50% thereafter).
- Their daughter, already active in the business, could continue management while the son benefited financially without direct responsibility.
This structure preserved the business as a family asset, while keeping the tax impact as low as possible.
The Outcome
Through this structured approach, we helped the couple:
- Reduce their future inheritance tax liability significantly.
- Provide financial security for each family member in a way that reflects their individual circumstances.
- Build a legacy plan that extends across multiple generations.
For the couple, the peace of mind came not just from saving tax, but from knowing their wealth would be managed responsibly and fairly — protecting the values they had worked a lifetime to build.
📞 Get in touch today to arrange a no-obligation chat and discover how we can help you protect your estate and give your loved ones peace of mind. Book your Estate Consultation here.
⚠️ Important: Trusts and tax planning are complex areas and depend on individual circumstances. Tax rules can change. This case study is anonymised and provided for illustrative purposes only.