Losing a loved one can be one of life’s most difficult experiences, often bringing important financial decisions at a time when clarity and support are needed most.
This was the situation Lizzie faced following the death of her husband, Ben. Alongside navigating a significant life change, she was left with a £1.4 million estate and a potential £160,000 Inheritance Tax liability, as well as the challenge of understanding a complex financial position without the adviser who had previously supported the family, following their retirement.
Working with Financial Consultant Dan Pigden, Lizzie was able to put a structured plan in place. By combining strategies such as a gift plan and loan plan, the approach helped reduce her immediate tax exposure, manage future estate growth more efficiently and create a long-term, multi-generational financial plan designed to support both Lizzie’s and her family’s future.
What was the client’s situation?
Following Ben’s death in 2025, Lizzie was faced with the challenge of managing the family’s finances without the person who had traditionally taken the lead.
Dan explains:
“Although she had always been involved in discussions, Ben had been more confident handling their investments, savings and making wider planning decisions. This left Lizzie with a number of important decisions to make and a significant amount of information to understand.
In late 2025, Lizzie also decided to sell the family home and move in temporarily with her daughter Layla and granddaughter Lucy. This gave her time to review her financial position and consider whether to purchase another property independently or jointly with Layla.”
Her priorities were clear:
- Understand her overall financial position.
- Ensure she had enough money for her own future needs.
- Protect her wealth where possible.
- Pass as much as possible to her family in a tax-efficient way.
With three generations involved, this was not simply about reducing an Inheritance Tax liability. It was about creating a long-term strategy that supported both Lizzie’s financial security and her family’s future.
Building a complete financial picture
Before making any recommendations, Dan worked closely with Lizzie to build a full picture of her finances and review the planning that had already been completed with her previous adviser.
“Around ten years earlier, Lizzie and Ben had begun Inheritance Tax planning, including setting up trust arrangements designed to reduce the value of their taxable estate over time. While this had been effective, Ben had continued to manage a large portion of their wealth independently, and the value of the estate had grown significantly through a combination of investments, shareholdings and cash savings.
This meant that although planning existed and had been successful, it needed to be reviewed in light of Lizzie’s current circumstances and future objectives.”
Dan helped Lizzie bring everything together and understand where her money was distributed, which included:
- Investment portfolios.
- ISAs.
- Shareholdings.
- Cash savings.
- Existing trust arrangements.
- Proceeds from the sale of her home.
This process gave Lizzie a much clearer understanding of her finances and formed the foundation for a new strategy.
“A large part of the early work was simply bringing everything together. Once we understood what was in place, we could look at where the opportunities were and what would be most suitable for Lizzie going forward.”
Identifying the Inheritance Tax challenge
Following a full review, Lizzie’s estate was valued at approximately £1.4 million.
By combining her own allowances with those inherited from Ben, Lizzie could pass on up to £1 million free from Inheritance Tax, made up of the Nil Rate Band and Residence Nil Rate Band allowances:
| Available allowance | IHT free amount |
| Combined Nil Rate Band allowances | £650,000 |
| Combined Residence Nil Rate Band Allowances | £350,000 |
| Total: | £1 million IHT free |
However, this still left approximately £400,000 subject to Inheritance Tax at 40%, creating a potential liability of £160,000.
While previous planning had helped reduce the family’s exposure, the challenge was that Lizzie’s estate had continued to grow over time.
“The challenge wasn’t just the current liability. The estate was continuing to grow, which, while positive, risked increasing Lizzie’s overall Inheritance Tax exposure. The focus therefore became finding a way to manage that growth more efficiently while also reducing the existing liability.”
This meant balancing two priorities:
- Reducing Lizzie’s future Inheritance Tax exposure.
- Ensuring Lizzie retained access to funds for her own future.
How did Dan create a new long-term strategy?
A key step was understanding how much of her wealth Lizzie felt comfortable setting aside for future generations.
“Any gifting strategy must be based on money the client genuinely feels they will not need during their lifetime.
After reviewing her position, Lizzie identified capital that she was unlikely to use, while still retaining sufficient funds for her future, including purchasing another home.
So, the first step was to create a new gift plan.”
What is a gift plan and why was it used?
A gift plan involves placing money into a trust. If the individual survives seven years from the date the money was deposited, the original amount typically falls outside of their estate for Inheritance Tax purposes. In addition, any future growth generated within the trust falls outside of the estate immediately.
Lizzie decided to place £325,000 into a gift plan.
“Lizzie felt comfortable with this approach as it helped address her key concern of preventing further growth from increasing her tax liability.
It wasn’t just about reducing her taxable estate, but also about helping to stop the problem from escalating while giving her confidence that more of her wealth could be passed on to her family.”
The next step in Dan’s strategy was to maintain Lizzie’s financial flexibility while addressing her tax liability. This is where a loan plan was introduced.
What is a loan plan and why was it used?
A loan plan works differently to a gift plan. The original amount deposited remains part of the estate, as it is repayable if needed. However, any growth generated within the plan typically sits outside of the estate, allowing the funds to grow more tax efficiently.
Lizzie placed £75,000 into the loan plan to balance tax efficiency with flexibility.
“Unlike the gift plan, the loan plan allows Lizzie to retain access to the £75,000 that she originally deposited. This was important because although Lizzie wanted to support her family, she also wanted financial flexibility and peace of mind that some of her money was still accessible if she needed it.”
Together, these strategies helped create a more balanced approach, helping to manage future estate growth while maintaining financial security for Lizzie.
Additional considerations around pensions
It was also important to consider Lizzie’s wider assets, particularly pensions, as both Lizzie and her daughter Layla held defined benefit pensions.
“Defined benefit pensions typically provide an income rather than a transferable lump sum, and, under current rules, do not usually form part of an individual’s estate for Inheritance Tax purposes.
This meant that Lizzie and Layla’s pensions sat outside of their respective estates, which was an important consideration when assessing the family’s overall exposure to Inheritance Tax.
This was particularly relevant given the proposed changes to the tax treatment of pensions from 2027. While defined benefit pensions remain outside of the estate as things stand, this is an area that will be monitored as legislation evolves.”
This meant that a large portion of the family’s overall wealth could remain outside of the Inheritance Tax calculation, further supporting the long-term planning strategy.
Why was ongoing financial planning important?
For Lizzie, the value of financial advice was not just about putting a plan in place. It was about having ongoing support as her circumstances continued to change.
Dan continues to work with Lizzie through regular reviews, covering:
- Investment performance.
- Changes in her personal circumstances.
- Reviewing her property plans.
- Understanding her future spending needs.
- Considering any potential future care needs.
This ensures that the strategy remains aligned with Lizzie’s circumstances as they evolve.
“Lizzie was very honest that managing finances had never been something she was particularly comfortable with. The ongoing relationship is important to her because it gives her confidence that everything is being reviewed and that she has someone to talk through decisions with whenever she needs to.”
Supporting multi-generational financial planning
Although the initial focus was on Lizzie, the wider strategy also considered future generations.
“Lizzie’s daughter Layla has been closely involved throughout, helping to ensure that the family understands what has been put in place and why those decisions have been made.
It has been great building relationships with the whole family and has helped ensure that everyone knows and is comfortable with what’s happening.”
The planning is designed to support:
- Lizzie today.
- Layla in the future.
- Lucy and future generations beyond that.
This approach helps create a smoother transition of wealth while ensuring the family remains aligned.
What was the outcome?
Dan’s advice helped Lizzie move from uncertainty to clarity, providing both immediate improvements and a structured plan for the future.
The key outcomes included:
- A plan projected to reduce the Inheritance Tax liability from £400,000 down to £75,000.
- Structuring her finances into a clearer, more manageable position.
- Creating a strategy designed to limit the estate’s future Inheritance Tax exposure.
- Retaining access to funds for Lizzie’s own needs.
- Engaging multiple generations in the planning process.
Most importantly, Lizzie now understands where her wealth is held, why decisions have been made and how her finances are structured to support both her future and her family’s.
How can Cooper Associates Wealth Management help?
Managing your finances after a major life change can feel overwhelming, particularly when there is a lot to understand or decisions to be made.
At Cooper Associates Wealth Management, we take the time to understand your full situation and explain your options clearly, helping you feel confident about the decisions ahead. Whether you are reviewing existing arrangements, planning for your family or simply looking to better understand your financial position, having the right support in place can make a meaningful difference.
Our advisers are here to help you bring everything together and build a plan that works not just for today, but for the future. Get in touch to book a no-obligation meeting and begin your journey with us today.
*The names used in this article have been changed to protect the anonymity of our clients.
