Heather Pollard Tower Street Finance
Heather Pollard, Tower Street Finance’s [1] head of credit risk, policy and underwriting explains how solicitors can help their clients access their inheritance sooner, or solve an Inheritance Tax problem, by working with a flexible funding partner.
Probate delays are no surprise to solicitors but for executors, who are often also grieving, the convoluted process combined with the time it takes to receive a legacy often comes as an unwelcome shock.
Our latest research found three quarters of people who were due to receive an inheritance either didn’t know how long it would take or assumed it would be less than nine months – and in many cases a lot less.
There was also a lack of knowledge about the order in which things happen after somebody dies. Only one in five know that Inheritance Tax (IHT) has to be paid before the Grant of Probate is issued.
And only 13 per cent know the executor is the person liable for the bill, with 30 per cent claiming beneficiaries are responsible, 23 per cent identifying the estate, 8 per cent believing it is the solicitor’s responsibility and 20 per cent who didn’t know.
This lack of knowledge means around 2,000 families each year are unprepared for, and unable to pay, the average IHT bill of around £200,000.
That’s why Tower Street Finance, launched its Inheritance Tax (IHT) Loan [2] – to help solicitors provide a solution for clients who are denied access to their loved-one’s legacy because they can’t foot the tax bill.
The IHT Loan was designed to be simple and straightforward – but for times when the customer’s situation is anything but, our approach and the product can be flexible to suit individual needs. The ability to be flexible is one of the advantages that comes from being regulated by the Financial Conduct Authority as lender rather than a broker giving us control over the products we offer and how we underwrite them.
One such case was an estate with a large IHT liability, but with multiple properties making up the estate and a complex split of the assets between beneficiaries, the probate practitioner couldn’t see how an IHT Loan would be able to help.
Some of the beneficiaries lived in the estate properties already and didn’t want to sell immediately, and some were split between several people who couldn’t agree on what to do, so it was complicated.
However, it didn’t make the issue of an IHT bill totalling around £2m go away and the Will was structured so all the beneficiaries were responsible for IHT relating to the assets they were due to inherit.
We were able to work through the case with the solicitor and the executor and pay their first instalment of £200k, helping them out of a situation they didn’t think they’d be able to solve.
Moore private client solicitor Jessica Ellis said: “It’s a real point of difference that a loan provider can change the way their product works to suit our clients’ needs and this case in particular was one that we didn’t initially think the IHT Loan would be able to help with.
“It really highlights the benefits and of working in partnership with Tower Street Finance – because of this relationship we were able to give our clients an improved service.”
Our IHT Loan provides a lifeline for people in this situation. It’s a catch-22 for thousands of families each year, they can’t access their legacy until the tax bill has been paid but they don’t have the money to pay it until they’ve received their inheritance.
The product offers no monthly repayments and no credit checks, so it’s a risk-free way for these families, and their legal representatives, to access the £2bn a year we estimate is tied up in ‘locked estates’.
Find out more about joining the growing number of law firms who partner with us by emailing administrator@towerstreetfinance.co.uk [3] or calling 0343 504 7100. Or you can visit our website at www.towerstreetfinance.co.uk [4]