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- More than a retirement plan: building a family legacy
Chris and Liz, in their 70s, enjoy a secure retirement while making a meaningful difference to their family’s future.
Chris, 72, and Liz, 71, spent their working lives carefully building a secure financial future. Now happily retired, they enjoy a comfortable lifestyle, with their defined benefit (final salary) pensions and state pension providing more than enough income to meet their day-to-day living costs.
As a result, they rarely needed to draw on their pension and ISA investments. Instead, these assets continued to grow, steadily increasing the value of their estate. While this gave them considerable financial security, it also prompted an important question: could their wealth be put to better use?
Having been clients of The Private Office for several years, regular financial reviews highlighted that Chris and Liz's investment portfolio was no longer needed to support their retirement income. This presented an opportunity to focus on a goal that had become increasingly important to them: helping their family while they were still here to see the benefits.
With two adult children, James and Sarah, and two grandchildren, Lucy and Henry, Chris and Liz wanted the wealth they had worked so hard to build to make a meaningful difference at a time when it could have the greatest impact. Rather than simply passing on their estate in the future, they wanted to provide financial support during their lifetime whether helping their children achieve greater financial security or contributing towards opportunities for their grandchildren.
Alongside these family ambitions, they wanted to ensure their wealth would be passed on as tax-efficiently as possible. By combining lifetime gifting with a structured estate planning strategy, they hoped to create a lasting family legacy while reducing the potential inheritance tax liability on their estate.
Their key objectives were to:
- Maintain their financial security and lifestyle throughout retirement
- Transfer wealth to their children in the most tax-efficient way possible
- Support their grandchildren's future education and financial wellbeing
- Put in place a structured estate planning strategy to help reduce potential inheritance tax liabilities
- Bring the wider family into a coordinated, multigenerational financial planning approach
Chris and Liz were also considering the future sale of a London property, which was expected to release significant additional capital. They wanted these proceeds to form part of their long-term estate planning strategy, with the intention of making carefully structured lifetime gifts to their children and grandchildren.
The starting point was to give Chris and Liz complete confidence in their own financial future. Through detailed cashflow modelling and long-term financial planning, we confirmed that their defined benefit pensions and state pension would comfortably support their retirement lifestyle. This gave them the reassurance that their wider investments could be used more strategically without compromising their own financial security.
Their defined contribution pension and ISA portfolios continued to be managed with a long-term growth focus, while retaining the flexibility to adapt should their circumstances or objectives change.
With this foundation in place, we helped Chris and Liz turn their intergenerational wealth plans into reality.
A key first step was making a £100,000 lifetime gift to their son, James. This allowed them to begin transferring wealth at a time when it could have the greatest impact, while also starting to reduce the potential inheritance tax liability on their estate.
We also established Junior ISAs for their grandchildren, Lucy and Henry, which Chris and Liz continue to fund. These provide a simple, tax-efficient way to build long-term savings that will support future opportunities, whether for education, a first home or other important milestones.
Finally, we incorporated the planned sale of their London property into their long-term financial plan. By considering the proceeds well in advance, we developed a clear strategy for future gifting, ensuring any additional wealth can be passed to the next generation in a structured and tax-efficient way while supporting Chris and Liz's wider estate planning objectives.
Chris and Liz now have the confidence that comes from knowing their own financial future is secure. Their retirement income comfortably supports the lifestyle they enjoy, while a clear, long-term plan enables them to share their wealth with the people who matter most.
Lifetime gifting has allowed them to see the positive impact of their wealth first-hand, rather than waiting for it to be passed on through their estate. The gift to James, the ongoing contributions to Lucy and Henry's Junior ISAs and their plans for future gifting all form part of a coordinated family legacy strategy designed to benefit multiple generations.
As part of this approach, James has also become a client of The Private Office, creating continuity of advice across the family and helping to ensure the gifted assets are managed in line with the family's long-term objectives.
Most importantly, Chris and Liz can now focus on enjoying the retirement they worked so hard to achieve. As they spend time with their family and embrace new experiences including their current interrailing adventure through Italy, they can do so with the reassurance that they have a robust financial plan in place. One that provides security and confidence for today while continuing to create opportunities for their family’s future.
Client names have been changed to protect their identity.
This case study is intended as illustrative purposes only, it does not constitute individual advice and should not be used to inform financial decisions.
They are based upon our understanding (at the time of advice) of current law, HM Revenue and Custom's practice, tax rates and exemptions, which are subject to change.
A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up which would have an impact on the level of pension benefits available.
The Financial Conduct Authority (FCA) does not regulate cash flow planning, estate planning, tax or trust advice.
