Estate Planning - General Explanation

When dealing with estate distributions, the software's default is that unless an individual’s estate distribution is set otherwise on the Estate Plans screen, the software will assume that upon mortality, one hundred percent of the client’s estate will be distributed to his or her surviving spouse or partner. Thereafter, when the surviving spouse or partner dies, the remaining estate will be divided evenly among any remaining dependants within the plan. This may include children and grandchildren, provided they are included in the plan.

To view these distributions, go to the Overview > Legacy screen.

The first tab on this screen, Plan Legacy, will show distributions made using the default mortality ages as set in the plan.

For example, take the case study tutorial clients John and Julia Campbell, which includes their children, Alex and Martina.

John is set in the plan to die first at a default mortality age of 90. John’s estate summary will show 100% of his estate passing to Julia (“Estate distribution to Julia £…”). Some items, such as jointly owned properties/assets, will be passed in specie to the surviving spouse. Assets will otherwise be liquidated and passed to the spouse through the estate. The subsequent report for Julia, who will die later to the plan, will show 100% of her estate divided evenly and distributed to her surviving children, Alex and Martina.

The tabs along the top of the Legacy Overview screen give you options for viewing how the Campbell’s estate would be distributed if:

- John were to die first, at the end of the first year of the plan, “John – Immediate Legacy”; 
- Julia were to die first, at the end of the first year of the plan, “Julia – Immediate Legacy”; 
- John and Julia were to both die at the end of the first year of the plan – “Joint Immediate Legacy”.

These immediate legacy reports are also an option on the Reports screen (“Immediate Estate and Inheritance Overview”), where they can be selected for inclusion in PDF or Word format reports.

You may modify these default estate distributions, whenever necessary, by creating alternative estate plans for your clients on the Estate Plans screen.

Beneficiary designations can also be made for:

- Onshore and offshore life funds on the Investment screen > Insurance Beneficiary Designation panel); 
- Term policies and endowments on the Protection > Term & Endowment screen > Beneficiary Designation panel. 
- Whole life policies on the Protection > Whole Life screen > Beneficiary Designation panel.

Survivorship options can also be configured for unsecured pensions, final salary schemes and annuities on these respective screens in the Pensions section of the software. Money purchases are assumed to have a lump sum payout in trust (without a potential IHT “Estate Value”) to the survivor if mortality occurs prior to crystallisation or annuitisation.

Also note that you can use what-if scenarios and replacement Mortality events to create a drag-and-drop mortality simulations, when needed. Read more >>