Techzone

The death of a client is not the end of the advice journey. In many ways, it marks the beginning of one of the most complex, emotionally charged and administratively demanding periods a family will face.

At a time when grief and uncertainty can cloud judgement, families are required to navigate unfamiliar processes, interpret legal documents and make important financial decisions. This creates both a risk and an opportunity for advisers.

Supporting a bereaved family through the process at such a difficult time can strengthen relationships with the estate beneficiaries and ultimately secure them as future clients.

The burden on executors

The post of Legal Personal Representative (LPR) is an onerous undertaking.

Many executors are lay individuals - family members or friends who have little experience of estate administration. They are often unaware of their responsibilities, the legal requirements placed upon them, or the potential personal liabilities they may face. The result is a heightened risk of delays and errors. For families already dealing with grief, the administrative burden can be both financially costly and emotionally draining.

LPRs are responsible for administering a deceased person's estate in accordance with the law and the terms of the will (if one exists). Their duties include identifying and valuing assets and liabilities and applying for probate or letters of administration where there is no valid will or executor. They must also ensure that all debts, taxes (including inheritance tax), and expenses are settled before distributing the estate to beneficiaries. Even the distribution itself can be fraught with difficulties against increasingly complex family structures, including blended families, multiple marriages and estranged relatives.

LPRs must act in the best interests of the estate, exercising reasonable care and diligence, and keeping accurate records of all transactions. They are also responsible for dealing with HMRC, managing estate assets during the administration period, and resolving any claims against the estate.

From April 2027, LPRs will have the added burden for ensuring that any IHT due on pension death benefits is correctly accounted for and paid. LPRs will need to gather information from scheme administrators, include the appropriate value when reporting IHT, and coordinate tax payment despite having no direct control over the pension.

Failure to carry out these duties properly can result in personal liability, making it essential that LPRs act prudently and, where necessary, seek professional advice. Typical issues that LPRs get wrong include the failure to identify all assets and liabilities, distributing the estate before settling debts and tax, missing HMRC deadlines, and misinterpreting the will or intestacy rules. Other risks arise from poor communication with beneficiaries, lack of coordination with third parties (such as pension administrators), and not retaining sufficient funds to meet unexpected liabilities.

The Adviser's role

Financial advisers are uniquely positioned to support families through these challenges. Unlike many other professionals involved in estate administration, advisers typically have:

• A holistic understanding of the client's financial affairs
• A consolidated view of assets across pensions, investments and protection
• A longstanding relationship with the client, often built on trust and familiarity

This places advisers in a strong position to provide clarity and reassurance, helping to translate complex financial matters into clear terms. They can guide executors and beneficiaries through the steps involved in estate administration and set realistic expectations about timescales and outcomes.

Supporting decision making

From managing income needs in the short term to determining how assets should be distributed or retained, advisers can help families make informed decisions aligned with the original intentions of the deceased.

Coordinating across professionals

Estate administration often involves multiple parties, including solicitors, accountants and tax specialists. Advisers can play a central coordinating role, ensuring that information is shared effectively and that all parties are aligned in their approach.

Reducing the risk of errors

By providing oversight and expertise, advisers can help avoid common pitfalls; whether that is identifying all assets, ensuring tax liabilities are correctly calculated or preventing premature distributions.

The value of lifetime record keeping

Many of the challenges faced during estate administration stem from incomplete or inaccessible information. This is where proactive planning during a client's lifetime can make a significant difference.

Maintaining a centralised record of key information can provide enormous value to the executors, personal representatives and families who are left to administer the estate.

This may include:

• Details of all income and liabilities
• Pension, cash and investment holdings
• Protection and insurance policies
• Subscriptions and memberships
• Records of lifetime gifts and transfers
• Digital assets and online accounts
• Copies of key documents, or where to find them such as wills, powers of attorney, death benefit nomination forms etc.
• Contact details for key individuals and professional advisers

Keeping this information up to date and accessible ensures that executors can quickly identify what needs to be administered and where to find it. These should be revisited regularly to reflect changes in personal circumstances, family dynamics or legislation.

Engaging the next generation

Bereavement often represents a pivotal moment in the relationship between an adviser and a client's family. It is typically at this stage that control of wealth passes to the next generation and, with it, the opportunity to either retain the relationship. Engaging with beneficiaries before and after death can deliver several benefits. Early engagement helps build trust and familiarity, ensuring a relationship is established before the estate is administered and distributed; beneficiaries who understand the adviser's role are more likely to seek guidance when it matters.

At the same time, many beneficiaries will have limited experience managing wealth, so advisers can play an important role in preparing them for decision-making by providing guidance on investments, tax considerations, income planning and protection needs. Supporting continuity of the financial plan is another key aspect, as helping the next generation understand the rationale behind existing arrangements can improve the likelihood that these plans are either maintained or adapted appropriately following the client's death. From a business perspective, this approach also creates future advice opportunities, as retaining assets under management and developing relationships with beneficiaries supports a sustainable pipeline of ongoing client engagement.

Summary

Bereavement represents a critical juncture in the client journey. Relationships can either be lost or significantly strengthened during this period. While solicitors and accountants play essential roles, financial advisers are uniquely placed to bridge the gap between preparation and administration of the estate. A holistic view of the client's finances, combined with an ability to provide clarity and ongoing support, positions advisers as a central figure in delivering positive outcomes for families.

By proactively supporting clients during their lifetime through effective record keeping, regular reviews and engaging the next generation, families will be better prepared when the time comes.

In doing so, advisers not only deliver lasting value to clients and their beneficiaries but also strengthen and future-proof their own businesses.