July 2008

Making sure things run smoothly

The introduction of transferable nil rate bands between married couples and civil partners would seem to have taken away a huge burden for many people when organising their estate planning. So much so that many couples feel that they no longer have to take advice in this area as they believe that the nil rate band will transfer automatically on first death.

However, if you look a little deeper you can see that this is certainly not the case and if anything couples need even more guidance to ensure the transfer goes smoothly.

The reasons for this are many. Firstly, couples will continue to need expert guidance on how to maximise the benefits of their nil rate band. While such a transfer may seem to be the most effective way forward there may well be cases where a trust may still need to be employed and expert advice will be essential on an ongoing basis.

Secondly even if clients decide to use their transferable nil rate bands it doesn't mean that the process is automatic. The couple will need to gather and prepare a lot of documentation in advance if a claim is to be successful.

In addition to filling out and submitting forms a vast amount of documentation needs to be kept in order. In addition to producing the death certificate of the first to die, the surviving spouse and their representatives must also produce marriage or civil partnership certificates for the couple as well as any will that was written and this is just for starters. If you also add in the complications of divorces and remarriages you can see why this area can become extremely complex.

In this issue Axa's Mark Wilkinson goes into more detail as to what is required and the issues advisers and their clients will need to deal with when they progress down the transferable nil rate band route (pages 10-11).

What comes out of this is that even if on first glance the transfer of nil rate bands between spouses looks easy - it isn't. Couples and their personal representatives will need the continued guidance of an expert adviser to ensure detailed records are kept, the right forms are filled out and that important documentation is not lost.

By providing such a service the adviser can really add long term value not only to their clients but to their personal representatives as well.

Helen Morrissey
Editor - Retirement Planner
Incisive Media