Balancing the family interests

Aodh McGrath and Glenn Welby, Welby Associates'
Aodh McGrath and Glenn Welby, Welby Associates'

Having recently reviewed Mr and Mrs Jones – some local farmer’s wills it came as no surprise to discover that their married son Jack was to going inherit 85 acres that the Jones currently farm.

Life on the milking farm has been more than a struggle this past number of years and without help from Jack the elderly couple could not really have coped.

Jack’s main job is as primary school teacher but who provides invaluable support each day to enable daily farm activities to run smoothly.

Jack’s appreciation and knowledge of farming meant that it was an obvious choice that they should pass on the farming business to him.

Knowing the family well I enquired how the Jones’ felt about the fact that Sandra their eldest married daughter and James their other son who works as a religious volunteer overseas , were not likely to receive much from their estate when they both passed away.

With guilt in their eyes Mr and Mrs Jones proceeded to explain how they have tried to set aside some money during the years so that their other two children, whom they love as much as Jack, could be compensated in some respect given that Jack would inherit farm and stock valued at more than £1m .

Mr and Mrs Jones have accumulated approximately £35,000 of cash, but feel that if an emergency should arise they would need to use some of this money, given the volatile nature of farm incomes.

Although they expected their other two children to understand if they received little inheritance from the estate they wish that there was a way to balance in some way the fact that Jack was to receive the lion’s share.

Having prepared and outlined a review of Mr and Mrs Jones’ income and expenditure we agreed that out of the farm income there was surplus of approximately £250 per month that they currently set aside for savings.

I explained how, by redirecting this amount that we could insure both clients under what is known as a guaranteed Whole of Life plan and this would guarantee a sum of £275,000 to be paid into a trust on the second death of either Mr or Mrs Jones and that this could go some way to greatly enhance the will planning that they currently had.

Mrs Jones went on to explain how she personally would always have liked to have left behind some money for her three grandchildren, Darren, who is Jack’s only child and Sally and Andrew her daughter’s twins whom she adores.

I explained how it would be possible for £25,000 each to be specifically left within the trust for them and that they would be named as beneficiaries of this amount and James and Sandra to be named as beneficiaries of £100,000 each .

We proceeded to discuss who might best serve as trustees of this trust and mutually decided that all three children, Jack, James and Sandra should oversee and be the trustees of the money when their parents would pass away.

Mr and Mrs Jones could see how by saving £250 per month that they would most likely never be able to accumulate £275,000 and were delighted that I was able to assist in some way by relieving the overwhelming guilt they felt with their decision to leave Jack the farm and the farm stock.

Mr and Mrs Jones have explained how indebted they are to have been advised in this way and I retorted that it is all part of the service provided by an independent financial advisor.

For further information, contact Welby Associates on (028) 9262 2910