With people living longer, the need for private client departments in law firms is growing. But what do private client lawyers actually do? Here Laura Harrington-Rutterford explains her role.
Private client lawyers help clients to structure their affairs to protect their assets and to achieve tax efficiency for the benefit of the next generation.
This includes guiding clients through the process of making a will, helping them navigate inheritance tax and capital gains tax rules, and administering estates, trusts, and powers of attorney.
Here is a little more information on some of these key services:
Our team of experienced will writing solicitors and probate law experts can assist you with everything from drafting basic wills to the administration of estates and gifting of property.
Inheritance tax and tax planning
One of the most common reasons for making a will is to reduce the Inheritance Tax (IHT) payable on a person’s death. The rate of IHT is 40% and so there is often a great deal of money at stake. IHT can be minimised by:
- Making lifetime gifts or putting assets into a trust to reduce the value of the estate on death;
- Making a tax-efficient will which makes use of the nil rate band, spouse exemption, and charity exemption; and
- Investing in assets that qualify for Business Property Relief, such as AIM shares (shares quoted on the Alternative Investment Market).
Power of Attorney
As part of our wills and probate division, we can advise on Lasting Powers of Attorney and general mental capacity issues arising under the Mental Capacity Act 2005. A Lasting Power of Attorney (LPA) is a legal document that lets you appoint one or more people (known as ‘attorneys’) to help you make decisions or to make decisions on your behalf.
This gives you more control over what happens to you if, for example, you have an accident or an illness and can’t make decisions at the time they need to be made.
Capital Gains Tax
Capital Gains Tax is charged on the disposal of assets sold at a gain. The tax is charged on the difference between the acquisition cost and the proceeds of sale.
There are various reliefs and exemptions available to help reduce exposure to liability but this is a complicated area where the provision of good advice can make a great deal of difference. Our specialist tax and trust lawyers are able to help you either reduce a potential CGT liability or avoid it altogether, through the provision of prudent tax planning advice.
Estates and trusts
Estate planning is planning for one’s estate in the event that you become incapacitated or dies. A trust is traditionally used for minimising estate taxes and can offer other benefits as part of a well-crafted estate plan. A trust is an arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries.
Assets in a trust may be able to pass outside of probate, saving time, court fees, and potentially reducing estate taxes as well.
Other benefits of trusts include:
- Control of your wealth: You can specify the terms of a trust precisely, controlling when and to whom distributions may be made.
- Protection of your legacy: A properly constructed trust can help protect your estate from your heirs’ creditors or from beneficiaries who may not be adept at money management.
- Privacy and probate savings: Probate is a matter of public record; a trust may allow assets to pass outside of probate and remain private, in addition to possibly reducing the amount lost to court fees and taxes in the process.
Who do we work with?
Private client lawyers work with individuals, families, and organisations, providing legal advice.
Our private client lawyers also work for charitable bodies providing advice and legal services for registration, restructuring, creating charters or trust deeds as well as management and disbursement of funds that have been received or earned for charitable endeavours.
The workload of a typical private client lawyer might be comprised of drafting wills, executing the terms of the will in the instance of death, and the subsequent payment of properties and assets.
We also help clients to look after and grow their wealth and have expert knowledge of tax law and how to apply it.
Other activities will include providing investment advice, helping to set up offshore trusts, drafting contracts and business proposals, and handling sponsorships.