No one can predict what will happen in the future, but it is always beneficial for you and your family to have measures in place that can assist in every scenario. While often a sensitive subject to discuss, it is important to focus on methods which can legitimately preserve your wealth, both if your health declines or once you have passed away.’.
1.Lasting Power of Attorney
Did you know that the Alzheimer’s Society has calculated that one in six people over the age of 80 has dementia, 40,000 under the age of 65 have it and 225,000 people will likely develop dementia this year?
Setting up a Lasting Power of Attorney (LPA) is becoming an ever more relevant action to take. An attorney has a duty of care and a legal obligation to act within the law and the scope of the powers granted to them. There are two types of Lasting Power of Attorney, one for a person’s property and financial affairs and one for their health and welfare. The person setting up the LPA, the donor, appoints one or more people, the attorneys, so that in the event that they are unable to make decisions for themselves, the attorneys can make them on their behalf.
Putting an LPA in place means that the donor can select the most appropriate people to make decisions for them if they have an accident or an illness and cannot make their own decisions because they lack mental capacity.
2.Setting up a Will
While it is standard advice to make sure you have a Will in place, we find it still can be one of the areas overlooked or put off until it is too late. Not having a Will can cause significant issues for loved ones both financially and from a legal standpoint.
Prioritise getting your financial affairs in order, to make sure any actions are as tax efficient as possible, particularly in respect of Inheritance Tax when passing on wealth to family. Bear in mind that Wills need to be regularly reviewed to ensure they reflect your current wishes, accounting for your family’s particular circumstances, which will change over time
3. Reviewing portfolios
As we move through life so our circumstances change, and we will have different objectives for our investments at different stages in our life. When we are younger we can take more risks with our investments because we are looking at a longer time frame should we suffer from a market fall. As we get older, many people become more cautious, wanting to take less risks with the wealth they have accumulated to preserve it for their retirement or to pass on.
It is important to regularly review our portfolios to ensure they match where we are in our life’s journey, in terms of their performance, risk and our financial goals.
4. Long term care
Increased longevity in the UK has resulted in the growing need of more people to require long term care. Care homes can be expensive with many authorities struggling with funding, so the financial cost is falling on the individual.
What should be considered is the kind of establishment we would want to spend time in – the basic minimum afforded by an authority or something more in line with our normal living environment.
Early planning can help factor in the cost of care and prepare for it financially, so if it is needed loved ones are not trying to contend with local authority bureaucracy and financials as well as the emotional impact of having a loved one needing care.
5. Maintain an accessible reserve
Discuss your finances, especially with your spouse or partner. It is common that, through a natural demarcation of domestic duties, one partner naturally handles the finances. Sadly, when something happens to that person, often their other half is left not knowing what they have and where things are and more worrying from an immediate impact, unable to access money to pay the bills.
It is recommended to hold enough money in a joint account to cover a few months’ bills. Should something unexpected happen, ensuring the household can be kept running should not become another worry at what can already be an emotional and uncertain time.
Everyone’s financial circumstances will be different; it pays to forward plan and seek Independent Financial Advice.
The Financial Conduct Authority does not regulate on Estate Planning and Tax Planning