The Family WealthFortress: How to Grow, Protect and Pass On Your Wealth

Transcript

speaker-0 (00:00.12)
Sadly, in many cases, the tax man gets a bigger chunk of the hard earned wealth you've built than any one of your individual children, which is madness and also sounds so incredibly wrong. The sad truth is, it will happen. It does happen and it is happening.

speaker-1 (00:15.006)
biggest change in my financial lifetime and I'm shocked and stunned and completely bewildered by the pension change coming in 2027.

Hello, good afternoon and welcome everyone. I'm Kevin Whelan, founder of Wealth Builders. I'm joined by my co-director and the guy who runs our program to help families that we deal with, hence the word family. Wealth Fortress is all about families. We're a complete family driven terms of values, Paul, but welcome.

speaker-0 (00:46.126)
Hey Kevin. Good to see you again. Looking forward to getting into something interesting and hopefully, you know, giving some insight and some value to people that perhaps not quite aware of because it's it's complex this landscape, right? And and almost feels like it's changing every every month.

speaker-1 (01:04.161)
Well, it'll be changing with the budget. So that'll be coming up soon. And with the government already spending a billion pounds a month, which is, yeah, that's a big mortgage, right? It's about 8 % of GDP. So in other words, one in every eight pounds that the country is spending isn't on benefits, isn't on roads, isn't on people's pensions. It's not on defense, it's on debt.

And that's just going to get bigger. So hence we need to be aware of what's going on and to be aware of the need to be fleet of foot financially, really. So, you know, find people who you like, you trust and support to help you plug into this knowledge. We will tell you how you can find, save, make, and protect your money. So finding lost money.

Make savings so that you cost you less because whenever money is spent that doesn't need to be spent in fees and so on, it's a hidden tax. It's just a tax. If you make money, then you've got more money to build your wealth with and more to protect it and so on. Our target for the families we work with, it's not for everyone, hence it's one person's hand up. It's some of you have already built some complexity in your life.

And we believe we can make a hundred grand worth of difference as a minimum to your life in either finding, saving, making or protecting. And Paul, you give some case studies. In fact, we had one yesterday. We met one of our new clients yesterday. And what did she say,

speaker-0 (02:40.034)
Did

speaker-0 (02:44.288)
In a very short space of time with working with us on the on the Fortress, that she discovered a forty-five thousand pound pension that she'd completely forgotten, out of the scope of her wealth planning for a number of years, and is now being brought back onto the table as a solid part of a future wealth plan for her, which is fantastic.

speaker-1 (03:07.554)
It was interesting because I said to a joke in here, I I know you're trading time for money in your business, but 45 grand an hour, that's a good hourly rate. I'll take that. And it's not the smallest, not the biggest pop we've ever found. You know, we found bots for people for a hundred thousand. So if you've got some lost pensions out there, we can definitely help you find them with a checklist, but let's not get too detailed. So we're going to have Paul bring in some ideas that you can directly apply today.

or in the next week. It's not just a, don't want you to be overwhelmed with information. We're obviously going to cover a lot because there's a lot of complexity as Paul has alluded to. And we're going to introduce you to the concept. It's unique to wealth builders called the family wealth fortress. Most people don't have a fortress. Most people have a kind of a loose collection of things because when people are successful and we're hoping you are, but if your assets are over a million,

You're already in the inheritance tax bracket. So it doesn't take much, does it? I mean, you and I live in the Southeast pole and it doesn't take much to have a million pound house, let alone, property portfolios, business and other interests. So, you know, we've got a big concern about the most hated tax in the UK, the most pernicious tax. means slowly grabs you like a big net just trawling around the UK.

And with all that debt the UK have got, that net is going to get tighter and tighter. And that's not me scaremongering that's already happening as we'll reveal about pensions. And it's also about preparing the next generation because I don't know about you, my parents didn't talk about money and we'll talk about my background in a minute. And it wasn't, it was almost like the silent generation. And we're trying to encourage our families to open up.

to be more communicative to involve the next generation.

speaker-0 (05:07.18)
Yeah, it's interesting, isn't it, actually, Kevin, that that point resonates with almost every single one of the families that we work with. My parents didn't do a good job, or sometimes even worse, I don't want that for my children. I don't ever want them to be in a situation where something tragic happens and they don't know where to go and they don't know what to do, and they've got no understanding of what this inheritance really means. And I think there's a scary statistic, isn't there, about

the erosion of wealth within three generations that, you know, is is shocking and worrying, but is something that can easily be remedied with a plan.

speaker-1 (05:47.63)
Yeah. We'll pick up the small point Paul, actually that you made, which really helpful is that what I love about working with families rather than the sort of traditional advisory thing, which is about advisors with products in mind. And whenever you've got an advisor who sells a product, everything that looks like a product is going to be sold to you. So, you know, if they'd, so think about decisions that are made. You mentioned Paul, people making decisions and knee jerk.

in isolation, sometimes as a result of an event. But general decisions are made in isolation, they? And ICE are taken out here, a will made there, you know, a business created this day with some things missing that we notice all the time. So decisions made in isolation, multiple advisors with different opinions, often conflicting opinions, and definitely conflicts of interest that people see particularly in

in the advisory world that, you know, they want to control your money. And we don't want to do that. And we love working with families because one of the things my daughter observed the other day, actually, when we were talking about it is, dad, don't all the families want to look after the next generation? It's not about selfishness in themselves. It's about how do you prepare for the next generation? So we'll make a point that we are focused on families. We know.

that people don't have families or don't have direct descendants and that's okay. We can still help that, but the biggest benefit is for those who care for the next generation, almost planting a tree for the next generation to shade themselves under. Now that's what we see out there, but we thought we'd get a little bit of interaction going here, Paul. We'd ask people, what are their concerns? You know, see if they're backing up what we're seeing when we talk to people out there in the real world.

People tell us Paul, don't they? Something's missing, but it's just, why'd you do things in random silos? Just doesn't seem to work. And that complexity means people get confused. And when people get confused or overwhelmed, cause AI can overwhelm, which we're seeing as well, confused minds do nothing. And when you do nothing, the worst thing, I'm going to say this twice, by the way.

speaker-1 (08:12.686)
The worst thing you can do once you understand the inheritance tax is to do nothing. Let me say that loud and clear. Once you've discovered you have an inheritance tax bill paid for by your family, the next generation, not you, you cannot unlearn that. And the worst thing you can do is do nothing. There's always something you can do. And we're going to help you crystallize what your inheritance tax bill is, give you a tool you can do on your own.

to find out and help you take some steps that you can start to minimize your inheritance tax. Now, don't wait for someone to die and go, no, it's too late. Don't wait till you're in your seventies. You know, do something now. And it's not difficult. Some things are really, really easy. And one of those Paul, you'll highlight very shortly. Right. So we'll, we'll carry on and we're going to talk quite a lot about things that are changing.

as a massive, massive change, the biggest change in my financial lifetime. And I've been around the world of finance over 30 years now. And I'm shocked and stunned and completely bewildered by the pension change coming in 2027. But also in case you haven't noticed, the inheritance tax thresholds been frozen since 2009. Nothing else has been frozen that long.

speaker-0 (09:37.56)
Such a long time, isn't it? Such an incredibly long time for a tax bracket to not move.

speaker-1 (09:42.766)
Yeah, mean, crumbs. mean, and the obvious, and it's not going to change until 2031. And that's even if it does. So in other words, the end of the parliament, not going to see a change. So there'll be 20 years soon where the amount of money you can leave inheritance tax free hasn't changed. 20 years. I mean, 20 years ago, I might have almost had hair. So what

What's the property value gone up in 20 years? It's crazy. And, and I'm, while I'm making light of it, I'm not, I'm really incensed and I believe it's unfair. And we'll be shouting loud from the rooftops in the coming months. We're only seven months away. We'll be doing everything in our power to show people what they need to do and be aware of the need for reviews that are impartial. Not somebody who's trying to make money.

from your inheritance tax or capture your money, but someone's going to show you what to do. What I want to talk about first is inheritance tax. Okay. So inheritance tax is a tax on death. It's not paid by the parents. It's paid by the next generation or the beneficiaries. And this frozen allowance, which has very sexy term called the nil rate band. Unfortunately,

Lots of wealth and tax language is steeped in history and the language choice can be a bit impenetrable, but nil rate bands mean means you don't pay tax on the first 325,000. That's what the nil rate band means. Most people have heard that before and you know, they could answer that question, but you also get an allowance called the resident nil rate band or the residence nil rate band of 175,000. This is per person by the way. And

If you leave your main home to your next of kin, your children, you get another allowance, which is 175, which means 500,000 pounds per individual. And that individual allowance is transferable if you're married, not if you're not. We've had a few conversations, Paul, haven't we, with business owners we met who haven't been married and we try and get them to be slightly less romantic, but work out what the tax bill will be.

speaker-1 (12:03.992)
from being married and sometimes that's worked, it?

speaker-0 (12:06.838)
Yeah, it definitely provokes some interesting conversation on the ride home sometimes, I think that's for sure, but

speaker-1 (12:13.474)
I think Ricky Gervais, although he's not our client, I'm not laying claim to that, but he's decided to marry after years and years of cohabiting with his partner just because, well, why the hell would I just give tax away for not being married? Anyway, so there are some benefits of being married, trying to think of a few others. Anyway, £1 million per couple. I've got three grown up kids. I love them all. And the tax, the baseline tax is 40%. So.

You tell the tale often Paul about like someone like me with three kids. What's the story?

speaker-0 (12:48.526)
Well, sadly, in many cases, the tax man gets a bigger chunk of the hard earned wealth you've built than any one of your individual children, which is when you say it out loud, sounds like madness and and also sounds so incredibly wrong. But the sad truth is, it will happen. It does happen and it is happening.

speaker-1 (13:07.768)
It is happening and the amount of money that it's happening with right now is the same as our national debt. It's a billion a month. That's how much is being collected by the revenue from people who've died. And by the way, the tax has to be paid within six months of death. So it's not like you can sell stuff. But a question for you later that often shocks people. And going back to Paul's point, you know, if a hundred percent of whatever's left is part of your estate.

And you've got three kids getting a hundred, you know, if the total is a hundred revenue gets 40, your kids get 20 each. It's crazy. And it shocks me that people just sleepwalking into this. And, if you've got, and you've done a great job, we live in a really nice house in Surrey or Bankston and Kent, wherever you live. that's just where we live. In two million pound house, you lose all your allowance. So as soon as you've got 2 million.

that resident Nill Ray band of 175 starts to be reduced. And when you get to 2.7, so those of you who've got a property portfolio and your total worth is 2.7, that 175 has gone, which means 350,000 pounds worth of tax-free allowance has just been wiped out. And again, there are things you can do. Now,

It's not just limited to people. There's two inheritance tax regimes in this country. One is for people and the other is for business. Interestingly, businesses get relief. It used to be unlimited. You know, so if Kev died and left wealth builders, whatever wealth builders was worth would be in completely inheritance tax free. It's not the case anymore. It's now, but it's a trading company. It's not an investment company. So if you've got a property portfolio, that doesn't count. That's an investment company.

If you've got a family investment company and you're making money from investments, doesn't count. You've got to have a business services, goods. You get the idea. You know what you're doing. If you've got a business, you're allowed two and half million pounds tax free per person. So a couple 5 million. And then anything over that is half the tax. So 20%. So you can see this, even though business owners and agricultural owners.

speaker-1 (15:23.404)
been up in arms about it was unlimited now it's capped. It's still much better to think about if you've got assets in your personal life, could any of those be transferred into a business? Could any of those, could any of your time or energy or skill be used to create a business instead of just the asset? If you're into property, could you coach and teach and generate a trading business on the side? And that way you can start to do that. And we'll have an interesting.

Example a little bit later, how your pension can even help you with that. It's unfair. It's unfair, ladies and gentlemen, the tax on pensions, April, 2027 round the corner. So previously, if you'd put decades of your life like I did and piled money into my pension because it was tax free to put it in. In other words, if I paid money in from my business.

The company didn't pay corporation tax on it. So I'm growing a pension very nicely thinking that's great for my retirement. Fine. But equally, I know if I die, the value of the pension passed on to my kids. Today it does. I'm hoping to live past April 27. And if I do, and you think you're going to live past April 27, you need to know about this because your pension value, any pension value, including Andrea's lost.

that some 45 grand would be counted and that money gets counted and gets added to your estate, which means if you thought, I'm not worth 2 million, Kevin, you might be if you your pension. So it's a real serious issue and it's not just 40%. The tax on pensions is not just 40 % because the inheritance tax is paid. But if you're aged over 75, when you die,

Your children have got to pay income tax on that as well. And the combination of the taxes can be as high as, well, more than that, but 64 % if you've got higher rate tax paying children on your death. And it can be even worse than that. So the tax bill is huge, it's unfair, and most people don't know what to do about it. They're just building their pension up. Now I'm not saying pensions are bad value. They're still great for retirement. But if you've been thinking like I have historically,

speaker-1 (17:48.482)
that build your pension to do both things, you're have to seriously think about what you do moving forward. And also with pensions, know, it's the executives who've got to pay the tax. So the executives are the people named in your will. Have you made a will? Are you like my dad and didn't get around to it? If you haven't, the executives are called something else, but it's personal representatives, but it's still the same thing. They are people responsible to distribute, collect,

report and distribute your estate. And although there are some changes afoot, currently, executives are responsible. So your kids are responsible for reporting on your pensions. But what if you're not in control of them? What if they're in different pots? What if they're all over the place? What if they're part of the 30 billion, not million, 30 billion that's just floating around?

You know, we help people connect to it, but we can't have 30 billion crumbs. That'd be huge number of people. So they've got to calculate, report the tax, pay the tax. And if they make any mistakes, it's the individual executives who are personally responsible for tax. So they can be fined as individuals. Crumbs who'd be an executor. If you've made a will and you got a pension, you might want to have a chat with your executors because you could be lumbering them.

with a problem. not just your kids, but other people who you trust. And the most important thing you can do, if you do nothing else today, please do this, right? Go and use our free IHT calculator. We'll put a link because when you go and do your calculation, even if it's rough, most people when we see the inheritor's tax that discuss them, Paul, they're rough and ready, aren't they? I didn't include that or I didn't include that.

And that's okay.

speaker-0 (19:43.39)
Does it? It's just a ballpark at this point.

speaker-1 (19:45.558)
Yeah, it's what ballpark you in and, and it wouldn't be too long for you to work it out. But when you see the tax and, know, we see the taxes for people and sometimes they're in the millions and wow, that's a big problem, you know, because if you see it for the first time, you never knew what it was. just knew inheritor's tax was something you can't unsee it. You can't unsee it, which means you have to do something about it. Cause if you don't.

What are your kids going to sell pay the tax? Because they have to sell something to pay the tax. That's what I mean by pernicious. There's a dry tax. It's not like capital gains on a property. You sell a property, you make money, you've got money to pay the tax. You've got no money to pay the tax. And if you've got a property portfolio and a home you live in and all this tax has got to be paid, what are they going to sell? Do they know how to sell?

Are they going to sell your hard earned assets that you've worked over decades to build? You've studiously added value and then you're going to have to sell at a rock bottom price just to pay the tax. Or borrow the money from a third party at exorbitant rates. Otherwise you're going to pay interest to the inland revenue and get fined on top. You have to find your tax bill. You've got to know what your inheritance tax is. And bear in mind.

that the inheritance tax, if the reliefs are frozen at 325, that's your estate's going to get bigger just naturally. We will assume property prices will go up. We'll assume the value of your pension goes up. Generally speaking, we'll assume the value of your investment goes up. Generally speaking, if you've got a business, albeit the business might qualify for business inheritance relief called BPR or business property relief. So there you go.

What would your kids have to sell? I mean, that's toughie, isn't it? If you're a portfolio of property owner, we're going to move on from inheritance tax and talk to you about the importance of understanding a joined up plan, not a jigsaw puzzle. So don't leave your family a puzzle. We say don't leave your family a puzzle, leave them a fortress. And a fortress will have multiple layers of joined up

speaker-1 (22:05.122)
well-organized, well-orchestrated connections that are just impenetrable once you work it out. I'm going to show you how to do that. But for now, you know, in my learning, in my sharing, I've kind of quantified, at least in terms of broad outlines, that the jigsaw puzzle pieces kind of in finance fall into these categories. You know, so taxes everywhere, your legal position, financial products and plans you may own.

However you structure anything, certainly your business, and we'll talk about business structures. Pensions and SaaS, whether it's a pension or a SaaS, but SaaS has got a brighter place when it comes to inheritance tax, we'll touch on that. Recurring income, and then of course the legacy planning. How do you teach, involve, help become stewards of money the next generation? Because I've seen in my own family, not direct family, but a relation where a lady family member died at 61.

and all her assets were left to her daughter who blew them. She didn't have the responsibility. And because everything was given without a rule book, without guidance, the money can be blown. And also there are children in families where they can't look after themselves, whether it's autism, whether it's a physical disability, a learning disability or some other thing that hampers their ability.

to have the real capacity to make decisions. So anyway, you can see all of these things and we've joined them all together. So we've created together a family wealth fortress where everything is seen in one place. Everything is discussed in one place. Everything is coordinated in one place. And you can see how that works. And the whole principle is to organize, in other words, get all the records together.

to build wealth, to ensure the safety of what we call the founder family members, the husbands and wives of the people we sit in front of every week, to protect the wealth and then ultimately to teach the wisdom to transfer the wealth. As I get older and this inheritance tax thing becomes so big an issue for me to help others, I want to be known for this. This is my kind of swan song project, Paul. I'll probably shuffle off into the

speaker-1 (24:30.882)
financially there probably with a bit of luck, you'll create an AI version of me to keep chatting stuff. But at some point I'll stop and you and the rest of team will take over. But the principles that we've established now as a response to the inheritance tax changes, that was the catalyst that just blew me away. Not in a good way, in a bad way to say, I need to do something about this. And although it says wealth builders in the last picture, we build the wealth for the families in front of us.

And this just gives you an idea. we create the picture. In this case, it's a made up family. It's not a real family. I'll show you some real ones in a minute. Where the Anderson family, can see it's like we're trying to get you to think about your wealth as if it's a business in its own right. And that gives the business life, energy, purpose, rigor, because we're holding 90 day board meetings.

in order to say, what are we doing? What are the top priorities for this quarter? And then what did you do? And what are we, we had some meetings yesterday. So what did you do in June, July, and August, you know, to then have the meeting in September to work out, right, what do need to do for September, October, November? So every quarter, the family's wealth is getting tighter and tighter and better organized.

going out the door, not going out the door. Confusion is no longer confusion, it's clarity. And we're loving doing this. I mean, it's probably the most pleasurable parts of my business life so far. So, you know, I know you're enjoying them too, Paul, when we have them, So Paul, we're going to talk about some of the things in each of those areas that we see people making mistakes and some things that somebody could do themselves right now that would do something in each of the areas.

So I'll talk about mistakes and then perhaps you could think about somebody that we touched and they've done something that will help themselves. So the thing that I notice is, and I'm cheeky and direct and that's fine, is I've never met anybody with an IHT plan. I don't even mean a robust one. I've never seen anybody with a plan. And that's what's missing. And accountants, they don't do inheritance tax.

speaker-1 (26:56.044)
Because where do accountants normally focus is back. What did you do last year to do your tax return? What did you do for your corporation tax? So there's just challenges everywhere. And I'll tell you what we're specifically doing about that in a minute, because I was shocked at how little accountants know about this. And there's confusion everywhere, especially around gifting and the word trust comes up everywhere, So we know this confusion.

But what could somebody do that would be useful for them to be able to pick up and do something in the next seven days that would make a difference in terms of reducing any of the main taxes that we see? if you can think of one for inheritor's tax, even better.

speaker-0 (27:44.162)
Well, I definitely can. for me, this is probably the simplest thing you can do. And it stems from a really great piece of work that people do to protect their families, which is take out life insurance. And they take out life insurance because they want their loved ones at a time where emotionally they're they're troubled to not financially be troubled. But very rarely.

Do they do the right thing, the next step of that journey, which is to put the life insurance policy in trust? You just mentioned trust there. Really, all it means is the life insurance just goes into a box. So instead of paying directly to the estate, which is what would usually happen, and the problem there is A, it gets caught up in the whole probate process, or if you don't have a will, then the intestacy process, which can drag on for months. And if you've got complexity in your life in your estate,

possibly even more than a year. And it's not actually available for the people that you need to have it at that time. And secondly, it adds an even bigger inheritance tax burden because it all now forms part of your estate. So the whatever it might be, million pounds worth of life cover you've set up to make sure your property portfolio debt is paid off now becomes a 400,000 pound IHT bill.

speaker-1 (29:07.598)
And whoever they arrange the policy with, the statistic I think you quoted when we were talking about just the other day, was less than 5 % of policies are actually in trust. So 95 people in 100, they're adding to their IHT bill when they think they're taking care of their family. It's nuts.

speaker-0 (29:26.227)
So easy to fix as well.

speaker-1 (29:28.046)
So they could fix it themselves without paying anybody.

speaker-0 (29:33.134)
Fish out policy documents, look at the name and the logo in the top left or the top right hand corner, and take yourself to that insurance provider's website. And on their website, they will have somewhere a documents library. And that documents library will have a section on trusts, protection trusts. They come in different names. Discretionary trust is often the type of trust that is used for this sort of thing. And there are couple of different options. So you'd be wise to do a little bit of

Reading just to understand the differences. But in most cases, a discretionary trust allows you to stop that life cover payout going into your estate. That means, one, if it goes into a trust, it's immediately available to the family once you produce the death certificate instead of waiting for months. Two, it's not part of the inheritance tax problem. It will literally take you 10 minutes to fill in the form, needs to be witnessed by a couple of people.

But it's very, very simple. It costs you nothing. You don't have to be a legal expert. It's simple and easy to do. Definitely something you could do in seven days, without a shadow of a doubt.

speaker-1 (30:42.478)
Okay, well thanks for that Paul and I think you make a good point that you don't need to be an expert to do some basic things. You don't need to be an accountant. You don't need to be a lawyer. You don't need to be a financial planner to take an interest in what you're doing. And just out of interest for me is because I knew accountants were so light on this, I'm the designated speaker for the CPD store, which looks after and provides CPD because all accounts need CPD.

And that's 2000 accountants and I'm teaching accountants this. So you think your accountant would know, they don't know, you know, so by doing some of these things, you're actually no more than your accountant and your financial advisor will do. And it doesn't take a lot to be able to do something. The common mistakes we see on legal, there's loads of those, too complex to get into the business ones for now, but

outdated wills and powers of attorney or no wills and powers of attorney. Certainly people think trusts, they always ask, should I put this thing in this trust? You don't need a trust right now. You just need to get your basics done and then not being aware that you might've named executors in your will who sometimes, you know, we see are overseas or sometimes they're just, you know, they wouldn't be the right executor. The thing you could probably do Paul is mention the one thing you gave someone some guidance on, on our recent one.

which they can do the powers of attorney themselves. you know, a lawyer is going to charge you 250 quid to do each one. You need four. If you're a couple, power of attorney for health, power of attorney for your wealth, your finance, and you can do them yourself. So how easy is it to do four powers of attorney on your own Paul?

speaker-0 (32:27.63)
Honestly, the most difficult part, like it is with any document like this, is choosing who you trust to look after your wishes and look after you in the case of a power of attorney when you're in a position where you can't make decisions for yourself. That's the hardest bit. And if you're even a little bit good at admin, you can go onto the gov.uk website. If you google gov.uk power of attorney, it'll take you to that. It's free site, costs you nothing to do it, to do the actual document.

There's a court fee, I think it's about 80-ish pounds per document, one off fee. But it doesn't cost you the professional fee to get it done. You just need to select people that you believe will be able to make decisions about you. They'll understand what you want and what you need. And then it's literally just filling in a form. Probably take you an hour. If you're a couple and you do four, you know, one for health, one for finances each, it could probably take you an hour. Okay. Probably one of the most valuable hours you'll spend doing admin.

speaker-1 (33:26.894)
Well, not quite as profitable as spending an hour to get 45 grand, but you know, a thousand pounds an hour is all right. And by the way, if you're like me and you hate admin, you look at it and go, well, the cost benefit, well, I'll pay a thousand pounds for someone to take care of it. That's your call. We're not saying the object of the exercise is to DIY it. In some cases, you definitely should not DIY things. but anyway, financial, we've talked about the life insurance, not in trust pool. We know that.

many people build their wealth and it's kind of all in one place, whether it's in property or just the stock market. One thing I do want to touch on, and you could mention this, is while AI is driven as all mad with where the future of it's going to go, it's got some outstanding benefits. And one of those is the ability to be able to interrogate what your fees are and what your performance is.

And from our experiences, consumer champions here at Well Builders, we don't intermediate things. We don't buy Isis. We don't buy pensions. We don't do those sort of things. You don't need honestly and genuinely to be paying retail prices or the management of your money. Some financial advice is absolutely critical. Definitely. If you're retiring and you want your tax free cash and know where they're drawn income, an advisor would be worth their weight in gold.

If you're thinking about something like, equity release, you need good advice. In fact, it's a legal obligation, but when you've got money already, typically we see people paying 2 % and you can often get the whole thing for less than half a percent. And you've got a case Paul, without giving a name where tell them what the value of the pension was and what the value of the saving was.

speaker-0 (35:20.788)
Yeah. actually there are so many stories, but the standout one, we're working with a couple who have done a great job of building wealth in the stock market, pensions ISES and some some other vehicles, and they are paying twenty-five thousand pounds a year per year on fees. We've been working with them now to get those fees down to even including advice.

Between five and ten thousand a year. So let's call that at least the saving of fifteen thousand pounds a year. Every single year. They're in their early sixties. Let's imagine they live to at least their early 80s. Even ignoring the compounding, just simple saving alone, 300,000 pounds worth of extra value for them and for their family eventually. No, it's not, it's absolutely not complicated.

speaker-1 (36:11.726)
And it's not difficult.

speaker-1 (36:15.628)
Yeah, the money management thing is all done in automated ways anyway. Portfolios are all driven by computers. So it's not difficult. I know sometimes it's an ask when you've never thought about it before. You just turned up at a meeting, you've acquiesced and nodded in the meeting when the stock market goes up and stock market goes down. It's the same kind of meeting. You don't need to pay for that. And in fact, some companies have been fined heavily because they've been charging for not doing it, including

charging when people are dead. So I don't like it guys. There are so many fees that should be exposed. I think I might write an article on this in the coming weeks because the regulation has been around since 1986. So we're 40 years in to regulation and we're still having, people think because something's regulated, it's safe. It's not. It just means it's in a box that you've got to buy.

as a retail customer. structures. The biggest challenge we have is really business owners. The lack of a coordination between the will, the articles of association, shareholder agreement, if there is one. I mean, it's a, it's a complex field and you need lawyers to do that. So it's not something you do on your own, but we see those gaps all the time. And also there's a lot of talk about family investment companies and

What the benefits and what the negatives are. And no matter how thinly you slice anything, there's two sides. So family investment companies can be great, but also you've got to bear in mind there's a cost associated with that and never pay a cost until you understand the benefit. So the key thing for me with structures and talk Paul talked about trusts is trust just gives you control. And the biggest control is,

Sideways disinheritance. Do you want to mention sideways disinheritance,

speaker-0 (38:14.264)
So, you know, people understandably worry that their children, and you always kind of use this terminology which I like, you know, marry Mr. or Mrs. Wright, who then turns out to be Mr. or Mrs. Wrong. And of course that can lead to separation and divorce. And if you haven't got your assets secured and protected in the right way, your wealth destined originally for your children.

effectively gets diluted and watered down and taken outside of the family as as a part of that divorce process.

speaker-1 (38:47.886)
So, you know, talk to somebody if you're doing your wills, think about a trust to, you know, a simple trust, a will trust to protect against sideways disinheritance. If you care about it, if you don't, ask what clarity brings, do you care? And I've met people who don't care and that's okay. But if you do care, I care, then, you know, with a 50 % divorce rate, I don't want to work hard for Mrs. to have a chunk of money on either the death or divorce with one of my family members. So that's not going to happen.

my case, but you have to decide whether it's important and then talk to somebody to ask the right questions. I think the biggest structure we see that needs an airing that probably is not as well aired as it could be. The best kept financial secret that I've ever come across been around since 1973, but it's still under the radar, which is the small self administered scheme or SAS. And we don't have time to go into all the benefits here, Paul.

The language is clunky, but the benefits so far from that, but talk about how a SaaS, because a SaaS is a group structure, maximum 11 people. So you're pooling. It's like a family investment company, but in a pension. Tell us Paul, why that SaaS structure can help with inheritance tax using these points here.

speaker-0 (40:06.09)
Normal pensions are just for one person. And as Kevin said then, Nassas uniquely is a group of people all bringing their wealth together. But for a family, what what that means is you can be really smart about how you assign the growth of any investment within that. It doesn't matter. It could be property, it could be funds, it could be lending, it could be any kind of thing. And I'll come on to the loan facility there in a second. But

You can uniquely designate assets with higher growth to the next generation. And the founder families, as Kevin referred to them earlier, you know, that's called mom and dad typically could be assigned the lower returning assets. So you're choosing deliberately to stagnate the growth on your part to accelerate the growth on your children's. And could be three generations, could be grandchildren too. We've seen that before.

And what that means is if you compound that over 20, 30, maybe even 40 years, you've shifted perfectly legitimately a huge chunk of the wealth that would otherwise have applied to you to your children in the next generation, which means when's when the day comes and you're no longer here and the inheritance tax is due, to calculated on a far smaller sum, which means less tax to pay, to strategic plan.

It's not something you do overnight. It's something you consciously choose to do and you reaffirm every year with everyone in your SAS who would be your family. It's such a powerful way of reducing the tax that we know is coming. It's it's not question mark, is it coming? It's in law, it's coming. Sixth of April, pensions will be part of the IHT net. And it's not difficult. The principle is just working out where you want the growth to go.

speaker-1 (41:54.764)
Yeah. And I think like anything we talked earlier on about the worst thing you do is do nothing is just explore these things. Right. So if you, it's only eligible if you've got a business, it's not, if you're an employee, not if you're self-employed. So if you've got a business and a family, make a note to say, I need to find out about this SaaS, do whatever AI you want to do to check it out in the first place. And then come back to us because, you know, we got a community now of 5,000 people, which is a lot.

who've been through or going through the kind of journey. And it's our specialist subject, our mastermind. So, you know, this is what we love to do. We need to move on a bit Paul, but just briefly, if you will, the fact that SaaS, uniquely SaaS, not a SIP, can lend up to 50 % of its value of a combined pot to the company who sets the SaaS up and why that makes a difference from an inheritance point of view.

speaker-0 (42:52.718)
Yeah. So back to the point about choosing to allocate lower returning assets, the loan or loan back facility is a very low cost way of borrowing money from the pension, which can then help the business to accelerate its own things. And Kevin mentioned earlier about if you've got a trading business and it can qualify for BPR business property belief, if you can find ways of enhancing the value of that business.

Which is going to qualify for a sizable chunk of relief, the loan back can be a facilitator of that. You can borrow the money at a low rate. The low rate grows your pension s at a slower pace than it might otherwise grow. And the growth occurs within well, let's say up to five million pounds worth of tax-free business assets. So not only are you growing your business positively and and benefiting from, you know, the the results of that today and every year thereafter, but you're also

helping towards further towards the reduction of of the IHT bill for the family.

speaker-1 (43:52.854)
And if you combine that with a family investment company as well, or you add your children as future owners of the business, if that's your kind of style of business, then all of these things can compound. And I think part of the issue for me is explaining this to you is it's everything that you can do compounds, which is the reason why I I was re-quoted, wasn't I, the other day, Paul, in a recent meeting. Kevin, don't you say never let 30 days go by without doing something. Something.

to improve your wealth, and that's true. And every 30 days, we're asking you to do something or working with you on something, whether it's on your own or together, so that you're compounding all the time. The recurring income piece of the jigsaw puzzle is really all about securing the income for the founders, the people like me and the people like Paul, so that you know you've got certainty of income, because wealth to me is all about certainty.

The fundamental challenge when you get older is the lack of certainty because you need things to be certain because if they're not and they're volatile, you've got a problem because you're trying to eke an income that you need certainty on from an uncertain asset. So helping you think about creating multiple streams of that, diversification of streams, business, property, investments, all sorts of different types of investments. We're not recommending investments, it's explaining the pros and cons.

And the fundamental piece then to understand when it comes to inheritance tax is there's no inheritance tax to pay when you gift from income. Inheritance tax is a tax on capital, not on income. So if you can build the security of your income to the level that you want it to be financially independent, then anything you give over and above that can be immediately no seven year clock.

no seven year rule, no maximum, absolutely no maximum, you can give away as much income as you want, provided of course, and the key to all of this Paul is documentation, right? So if you're giving away income now, what guidance would you give for people to make sure it's well documented?

speaker-0 (46:09.166)
It's not complex like many of these things, but the robustness of a set of figures that demonstrate you're not putting yourself into financial hardship every year, on a year by year basis, tax year, tax year to tax year, confirmation of your outgoings, confirmation of your incoming, being able to prove the surplus. This is money we don't need to live the lifestyle we're used to living. And it can change. Doesn't have to be the same every year, that but there has to be a pattern.

continuity of it. It's really down to audit trails, number one, and number two, clear, robust documentation that that explains what you're doing and why you're doing it. Yeah. It's almost like an expression of wishes alongside the will. The will does some very clear, stated legal things. The expression of wishes puts a little bit of human touch to it and says, this is why I want this and this is why I want that and this is why.

speaker-1 (47:04.558)
And the reason why that's important, ladies and gentlemen, is the Inland Revenue don't require a record of this at the beginning. They require it on death. So they want to see what's going on. And if there's no documentation, they'll wipe the gift out. And the whole principle of HMRC looking through old people's Facebook pages to see whether they've received anything, because lots of people we meet have gifted income or even gifted capital to children but haven't documented it.

So it's really important to start building documents. And from a legacy point of view, if you're passionate about legacy as much as I'm passionate about legacy, then you have to involve the next generation. You can't learn wisdom without doing. You can't just give people money and say, here's all my money, I've died, I've left you a load of money. It's better to get them involved as part of the journey so that they build the decision-making muscles. They build...

an understanding of your family wealth name and in many cases become part of that. And we help bring 18 year olds and people over 18 into SAS to help them get involved in the SAS so they start to become involved in that. We call that the SAS simulator. And also we help families to write a set of values, a document, a living document called a family charter. Now you could probably Google these things yourself and see if you could write yourself a family chart and that's fine.

But get your kids involved. can't Google that. know, Claude's not going to tell you how to get your kids involved. You need to make a decision to get them involved. In my view, if you care about it, you don't care about it, it's fine. But you know, we tend to work with people who do care. All right. So we've covered off all of the kind of main areas, the seven key structures. I just want to say though, that not everything we do and not everything we suggest you do is done simply for a financial record.

It could be for other benefits. So for example, you know, we create a wealth map so that you can see everything rather than it be on spreadsheets or bits of paper in drawers. So we call it a wealth mind map or a wealth map. And that's very passionately shared. I'm a visionary. I like to see things in pictures and we show that on screens to our members and meetings. A bit of a funny AI, of me.

speaker-1 (49:29.454)
saying you've got to keep your documents safe, right? In two ways. live documents. Here's a picture of me carrying my portable safe from my home to my office. That's my office. And it's got to be portable. It's got to be fireproof. It's got to be waterproof. And with flooding, not around at the moment, but certainly wildfires, burning down homes in the Midlands, you you need to keep your documents in a safe place, not in your head.

and get them on paper and also get them in a digital vault. So we've created digital vault. You could probably find one for yourself, but we've created one so that everything is stored electronically as a backup with a digital key for the next generation that they can unlock when the worst happens. And also things like family memories, family photographs. I've now got my family tree showing the Weelands going back to Ireland in the 1800s. Still can't get an Irish passport, however.

Board meetings, and we talked about those, Paul and I, and generally host the board meetings, and sometimes with experts if an expert needs to be brought in. Hopefully you're seeing that, you know, this is just a joined up process. Nothing is left to chance. You're not allowed to be confused. We become the coordinator. Now you can try and coordinate things for yourself and that's fine. And we'll help you on this webinar and we'll provide some more resources ongoing in the future.

But if you like the idea of having somebody trustworthy with no conflict of interest, who can help not create a jigsaw, but create for your family a fortress, then we also back ourselves in this. said at the beginning, we guarantee or we look for a hundred grand and we guarantee this for those families we choose to work with. I stress that we interview families, they interview us.

And we meet together to decide whether we think there's a right fit, whether the values are right, whether the assets are right, whether decision making is likely to be right. And we guarantee to find, save or make and protect your family at a minimum of a hundred grand. Well, in many cases with inheritance tax is tens of hundreds and possibly even millions. So it's really important to me that you understand that we're willing to back ourselves.

speaker-1 (51:56.64)
and take the risk away for those families who feel like, yeah, I like the cut of their jib. I like the sound of them working with me rather than me just taking a few ideas and trying to apply them randomly. We charge 10,000 pounds for it, by the way, so we're not hiding a fee, but I don't know about you, but 10 grand to get a hundred grand. think it's a fair ROI and it's backed by me in writing. Paul, well, thank you for coordinating. Thanks for the team in the background.

and until we see you on the podcast. See ya!

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