Adam and Liz are married and have two children who are financially independent: Robert, age 32, and Clare, age 28. Robert is married and has one child and Clare is going to get married. Both Robert and Clare are planning

to have more children.

Adam's and Liz's total estate consists of:

Jointly owned property: £1,500,000

Adams's ISA: £350,000

Liz's ISA: £200,000

Adam's pension: £870,000

Liz's pension: £650,000

Cash savings (joint account): £230,000

Adam's VCTs: £150,000

Jointly owned Buy to Let property: £350,000

They also have the following two mortgages:

Mortgage on residential property: £130,000

Buy To Let mortgage: £80,000

1.

Calculate the Inheritance Tax liability if Adam dies and transfers all of his estate to his children?

2.

Calculate the Inheritance Tax liability if Liz dies and she has a will where she transfers everything to her husband?

3.

Suggest 2 solutions to reduce their Inheritance Tax liability on the second death if they want their children to receive their estate? One solution should include a protection policy and one solution should include creation of a Trust. Explain the reasons for choosing the specific solutions.