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Act now, don’t be left saying ‘If only ….’

it is a time to reflect on those who have gone

As I sang auld lang syne, badly, it dawned on me that our youngest daughter is going to be 16 in a few weeks’ time. Sixteen years ago, all the talk was about millennium babies and Y2K. Even the New Year’s celebration switched from Big Ben to a hospital that could report the first child born in the 21st century.  In the run up we had all been working feverishly to ensure that the Y2K bug would not cause our country to grind to a halt.
It seems like only yesterday, yet here we are completing another application for a provisional driving licence.

For me it is also a time to reflect on those who have gone. Working closely with people approaching and those in retirement, you always run the risk that one or two may pass away during the course of the year. What is often forgotten is that the Wealth Manager or Financial Planners are amongst the first to be contacted following bereavement. Once the initial shock of losing a loved one is over the next question is likely to be, how will I cope financially, where is the Will and who is the man or lady that looks after mum and dad’s money?

It does not matter at which stage in life you are at

It does not matter at which stage in life you are, what is important that you are prepared. However, most of us have a habit of putting things off, whether  it is starting that pension, setting up life cover to protect the family, writing a Will or setting up a trust to reduce inheritance tax. So this year, when standard new year’s resolutions start to falter because the Christmas cake or the Quality Streets need finishing , think about making some financial resolutions for your or your family’s future.
There always seem to be one reason or another to stop you making a commitment, the market is too high, the market is too low, my matters are to complex, the rules are going to change, I do not know whom to ask and I cannot afford it, to name a few reasons for delaying action.

None of the above should stop you from making decisions. People are holding off their estate planning due to the proposed new property inheritance tax allowance. The rules around this will help some, but will not be fully in place until 2020. Most of the clients that have passed away this year would have expected to be with us in 2020. At the same time where one government introduces a new policy, the next can take away.  There are no guarantees that you will be able to benefit from any proposed changes, it is  therefore best to plan with today’s rules and worry about the future when it happens.

 

With Life and Critical illness cover or income protection, it is always going to be better to have some than none at all. Moving to saving a lump sum into a pension or an ISA, success comes from regular small contributions over a long time or large regular payments over a short period. The truth is that if you can only afford a small amount now, how will you afford a large amount in the future? So it is best to get started now with what you can afford and increase it when possible.

Returning to complexity

Returning to complexity, this is a scenario that I came across in a casual conversation over Christmas. I want to leave my estate to my children, but I want my second wife who is younger than me to live in the house which is solely owned by me. I would also like to leave something to her children, but I cannot do anything because she may want to down size during her lifetime if I am not around. This is so complex; therefore I have not bothered with a Will. Sounds complex when you are emotionally involved, however a good private client solicitor could probably cover this in a simple Will without going to some of the long drafts with multiple clauses from a Will writer. Doing nothing is absolutely the worse thing, dying intestate without a Will would paralyse his loved ones finances. All bank accounts in his name would be frozen leaving her without income. After that, she would eventually receive the first £250,000 and the rest would be split with half going to his wife and the other half would be divided between his own children. The current situation could see her thrown out of the home he wanted her to stay in during her lifetime. Frightening what doing nothing can cause and I have not mentioned the £270,000 inheritance tax bill that would have to be settled before his loved ones are considered.

Reflecting on 18 great years

This year I will celebrate 18 great years helping people maintain their lifestyles and passing their wealth to the next generation. During one of the early days when I was shadowing one of the senior advisers [Salesman], he was faced with an objection from a prospective client.  The objection was ‘tying my money up for 5 years is a long time’. To which the adviser replied ‘Five years looking forward is indeed a long time, however 5 years looking backward seems like only 5 minutes’.
That statement holds more truth with every year that goes by. If you are planning to start saving or to set up a plan to protect your children’s future, whether it is a simple life cover or a more complex trust. Do not listen to people that put up objections for taking control of your finances. Make a belated new year’s resolution to book an appointment to write or re-write a Will, start a pension or deal with your inheritance tax issues, now is as good a time as any. If you don’t, time may pass you by and you will be left thinking of missed opportunities.
Act now, don’t be left saying ‘If only ….’

 
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