Why collaboration between solicitors and financial planners matters more than ever

Clients face challenges today that would have been far less common just a few years ago.

People are living longer, family structures are becoming more complex, and asset values are continuing to rise. All of this, combined with ever-changing legislation, can make for more complicated estate planning, social care considerations, and divorce outcomes.

A 2024 report in the Guardian found that around 10,000 wills are challenged each year, with the main causes being:

• Higher property values
• A rise in second marriages leading to stepchildren being disinherited
• An increase in dementia cases leading to more claims that wills weren’t properly drawn up.

As such, there is growing value in cross-sector collaboration between solicitors and financial planners to help clients deal with increasingly complex arrangements and challenges.

Rising life expectancy will increase demand for social care and could complicate estate planning

People living longer is typically a sign of improving health services and lifestyles, which is undoubtedly positive. However, an ageing population also means there’s likely to be increased demand for social care, which can come with significant financial and legal complications.

Indeed, a report by the Care Quality Commission found that new requests for care were 4% higher in 2023/24 compared with the previous year, and 8% higher than in 2019/20.

Social care costs can be high, so it’s important for clients to put the necessary legal and financial structures in place to help ensure they maintain control over how their wealth and assets are used to fund it.

Financial planners can work with clients to model different scenarios to see how the costs of care could impact their wealth. They can also advise on strategies such as gifting or investing in annuities to help protect their assets from the costs of care.

Solicitors can support clients through formal legal processes, such as registering Lasting Powers of Attorney (LPA) and establishing trusts, and professional guidance can be integral for ensuring clients’ wishes are properly recorded and adhered to if they lose capacity as they get older.

You can read more about how solicitors and financial planners can work together to help clients plan for social care in our previous article on the topic.

Increasing numbers of blended families can make financial and legal proceedings more complex

Relationships and marriages are far more fluid than they once were, and an increasing number of families are now “blended”, meaning they contain children from previous relationships.

Data from the Office for National Statistics (ONS) reveal that over 1 million children live in step-families.

Increasingly complex family structures can lead to more challenging legal and financial processes.

For instance, asset ownership could become less clear in a divorce if there are multiple dependants. Similarly, for estate planning, complex familial arrangements can lead to more contested wills as family members might feel they have a claim to something they weren’t given.

As such, solicitors and financial planners need to ensure clients and their loved ones are supported and protected by the appropriate arrangements. This might include advising on and preparing Pension Sharing Orders, structuring divorce settlements to support the clients’ financial futures, and ensuring estate plans align with the family set-up and intentions.

It’s also important that solicitors and financial planners coordinate throughout their journey with the client to ensure their legal documents and financial plans are fully aligned. This can reduce the risk of conflict, ensure the client’s wishes are carried out, and help to deliver fair outcomes for all involved.

Rising property prices and changes to Inheritance Tax mean estate planning is more important than ever

Property prices have risen significantly in recent decades, and many homes that were once of modest value are now major components of estates.

Data from Cladco shows that the average property price has increased by almost £120,000 since 2009, which was the last time the nil-rate band was changed.

As property values have increased and tax thresholds have remained the same, passing them on efficiently to the next generation has also become more complicated.

Larger estates can heighten family tensions, and the likelihood of disputes rises considerably when significant assets are at stake.

Moreover, from April 2027, pensions are set to become liable for Inheritance Tax (IHT). This could mean that many families face a much larger tax bill unless they plan carefully.

This all demonstrates why estate planning is more important than ever. Financial planners can work with clients to explore strategies to improve the efficiency of their estate, such as gifting, putting assets in trust, or investing in Business Relief Schemes.

Solicitors make sure these strategies are properly implemented and legally compliant by drafting wills, establishing trusts, and ensuring all documents reflect the client’s intentions.

Collaboration between financial planners and solicitors can support mutual clients

As clients’ lives become more complex, the roles of both financial planners and solicitors are more important than ever. Each brings a distinct skillset, but it is the combination of financial and legal expertise that delivers the strongest outcomes.

Financial planners can help clients structure their estates, mitigate unnecessary taxes, and model how different outcomes, such as divorce or social care, could affect their long-term financial position.

Solicitors, meanwhile, provide the legal framework that turns these plans into reality. They draft wills, establish and manage trusts, negotiate settlements, and ensure key documents are properly prepared and registered.

When working separately, gaps can emerge that may only become apparent when something goes wrong. But when collaborating, clients benefit from a joined-up approach that protects both their financial position and legal interests.

Moreover, collaboration can not only lead to better client outcomes but also improve the efficiency and effectiveness of the services provided.

To find out more about how our sectors can work together for the benefit of our mutual clients, get in touch.

Email info@fbwealth.co.uk or call us on 0333 1122211.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, cashflow planning, tax planning, trusts, Lasting Powers of Attorney, or will writing.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.