I was recently talking to a financial adviser and we agreed that while people were generally happy to talk about investment and pension planning to secure their future finances, the protection side of financial planning was often overlooked.
What do we mean by protection? Essentially this is a matter of planning to deal with financial risks such as ensuring that you and your loved ones will be provided for should you be unable to work, if you lose the mental capacity to make decisions, if you die and you leave the property your loved ones to live with a significant mortgage still remaining or other significant debts. They will also be liable to pay inheritance tax.
For parents of young children there is a possibility that if both or one of the parents were to die especially whilst the children are young, there could be insufficient funds to see the children being able to live as the parents would wish. Furthermore, who would take on the parental role if both parents die and who would control the finances?
A surviving spouse or partner may find they cannot, on their own, afford the mortgage and upkeep of what had been the shared home.
Options to protect your wishes
In order to help you protect your finances, there are three important factors to consider:
- Make a will: To avoid any of the aforementioned situations you should make a will to sort out what you are able to leave for your loved ones in the most financially efficient way. You can also appoint legal guardians for your young children and trustees to look after the money;
- Insurance: Consider insurance to cover the mortgage, provide an income if you cannot work, create an inheritance for your loved ones, or fund funeral costs or inheritance tax;
- Lasting Power of Attorney: Appoint one or more people who will be able to make decisions and manage your money and finances on your behalf should you lose the capacity to do so, which sadly can be caused by accident or illness striking at any time and is not simply a problem for the elderly. A Lasting Power of Attorney can also be used to delegate medical decisions if you lose capacity.
So, how could you get started? Simply call us to make an appointment with one of our Wills & Wealth Planning team. You will have peace of mind in the knowledge that your loved ones will be cared for and they will have the most positive and affectionate of thoughts and memories of you.
We can also recommend reputable financial advisors to provide advice on investments and pension planning.
For further information on protecting your wishes, please contact a member of our Wills and Wealth planning team on 01625 442100.