This week, we saw the 5th UK Prime Minister to hold office in barely five years. That, in and of itself, is quite extraordinary. Throw in a change of party, a high-profile by-election (with another still to come), and no end of crisis at home and abroad, and it’s fair to say the last five years have been anything but boring politically.
This constant churn at the top has done nothing to build people’s confidence in long-term financial or estate planning. With each new leader comes another new set of ideas and policies – and, subsequently, people begin to feel the effects of this political whiplash.
That’s especially true when it comes to long-term decisions like Estate Planning. It’s hard enough to know what the rules will look like next week, let alone next month or next year!
Yet Estate Planning is plagued by a rather more fundamental problem: none of us really knows when we are going to die. By definition, then, our planning has to be in place before we pass away. So how do we reconcile the short-term nature of political rule-making with the long-term nature of our Estate Plans?
The honest answer is that we don’t try to predict the unpredictable – because we can’t. Instead, good Estate Planning is built to be robust in the face of change. We plan around sound principles rather than the whims of whoever happens to occupy Number 10 this month, and we build in as much flexibility as we sensibly can, so that a plan can adapt as the rules shift beneath our feet. Waiting for political certainty before you act is a fool’s errand – that certainty is never coming.
What we can do is read the direction of travel – and here our new Prime Minister does give us something to work with. Mr Burnham has long argued that Britain over-taxes work and under-taxes wealth. We won’t know anything concrete until the autumn Budget, but the balance of risk seems fairly clear: the rules are far more likely to get tougher than they are to get kinder. Put another way, the reliefs and allowances we enjoy today may well be as generous as they are ever going to be.
Which brings me back to my usual refrain. The uncertainty is precisely the reason to act – not the reason to wait. Get a well-constructed, flexible plan in place now, while the current rules (and the current tools) are still on the table. You can’t control who runs the country, and you certainly can’t control the timing of your own mortality – but you absolutely can control whether your affairs are in good order before either of those things changes. As always: the time is now. If you’d like to put a plan in place – or stress-test the one you already have – please do get in touch. We would be delighted to help.
