This recent case has highlighted just how important good advice is.
Normally we think of our pensions as being a great way to prepare for uncertain times ahead. We talk to our advisers to try to find the best plan and maximise returns but if we are in ill-health the government could end up benefitting rather than our families. Put simply, if you transfer a pension plan and then don’t survive 2 years you could end up paying inheritance tax at 40%.
Short term life insurance is often available to provide cover against the cost of any IHT liability.
Over the years we have provided cover for many hundreds of individuals whose problems have included diabetes, cholesterol, height-weight issues, raised blood pressure, a combination of these problems, heart attack, cancer, cystic fibrosis, multiple sclerosis and complex mental health issues. The list continually expands. Advances in medical science enable more and more health conditions to be considered as Insurance.
In this particular case, a woman, Mrs Staveley, went through a difficult divorce. As part of the divorce settlement a pension was set up for her. A few years later, she realised that there was a possibility that her ex-husband could benefit from her pension after her death and to avoid this possibility she decided to transfer her pension and make her two sons the beneficiaries. She died six weeks later.
However, because Mrs Staveley was terminally ill when she made the transfer and she died so soon after the transfer her estate was unable to prove the transfer was not made with a view to limiting inheritance tax: the bottom line was that the 40% tax was payable.
Pulse can offer 2 year term life insurance to people up to 85 years of age and sometimes to those in ill-health.
For 2 year life insurance for older clients, please do not hesitate to get in touch.
Telephone: 01280 841430 E-mail: [email protected]