If like most people you have been struggling to make ends meet during the current cost of living crisis, it’s understandable that long-term financial planning may have taken a back seat. However, neglecting to create a long-term plan can have serious consequences, especially when it comes to completing your estate plan.
Everyone has an estate – it simply refers to everything you own. Your estate plan is a plan that you create to outline what happens to your money and possessions when you pass away. While it may be an uncomfortable topic to think about, not having an estate plan can significantly impact your loved ones.
Getting started doesn’t have to be difficult. Here are some basic steps to help you take the first proactive measures:
1. Make a will and review it regularly: Without a will, there are predetermined rules about who would inherit your estate, which may not align with your wishes. By not having a will, you relinquish your say in who receives everything you leave behind. This could have devastating consequences for your loved ones. If you already have a will, remember to keep it up to date. Changes in family circumstances, inheritance tax rules, and legislation can all affect your will, so it’s advisable to review it at least every five years.
2. Set up a Power of Attorney: There may come a time when circumstances prevent you from handling your own affairs. A Power of Attorney (POA) allows a family member or friend to represent your interests and make important financial or medical decisions on your behalf. It’s crucial to understand that a POA doesn’t automatically transfer control to someone else. It only comes into effect when you’re unable to act in your own interest and can be a temporary measure. Think of a will as a document that helps your loved ones after your passing, while a POA is designed to assist you while you’re still alive. Don’t wait to set up a POA because if you become unable to make decisions, the court may appoint someone who may not make choices aligned with your preferences.
3. Ensure you know who will inherit your pension: Your pension is likely one of your most valuable assets, sometimes even surpassing the value of your family home. Many people assume that their will determines who inherits their pension, but that’s not the case. Your pension falls outside the scope of the will. It’s crucial to plan for what happens to your pension and designate the intended recipient upon your passing. When setting up a pension, you may have been asked to complete a “nomination of beneficiary” form. The individuals named on that form will typically be the ones who inherit your pension. However, over time, it’s easy to forget who you nominated. Therefore, it’s important to review this information and ensure your pension is allocated to the right person. Contact your pension provider if you need assistance with this.
4. Communicate your plans with loved ones: It’s essential to inform your loved ones about the location of your will, POA, and any other necessary documents they will need after your passing. This ensures they can access the information and fulfill your wishes during what will inevitably be a challenging time.
Living for the present, but planning for the future
This article only scratches the surface of estate planning, touching on a few key points. The crucial takeaway is that none of us know what the future holds, and it’s vital to take steps to create an estate plan if you haven’t already done so. Remember that there can be a silver lining – having your affairs in order brings peace of mind and allows you to focus more fully on enjoying life and living each day to the fullest.
Could you benefit from financial advice?
Managing the transfer of your money and possessions after your passing involves complex financial and legal considerations. However, navigating this process doesn’t have to be overwhelming.
If you would like personalised guidance and support in creating an effective estate plan, I’m here to help. As a certified financial planner and qualified inheritance tax adviser, I have the expertise to assist you in navigating this important process.
I will work with you to develop a comprehensive estate plan that meets your specific needs and goals.
Contact me at https://calendly.com/marcburman to discuss how I can assist you in securing your financial future and the well-being of your loved ones through proper estate planning.
The following article is provided for informational purposes only and is specific to the United Kingdom. It should not be considered as financial or legal advice. Estate planning involves complex legal and financial considerations that can vary based on individual circumstances and UK laws.
Laws and regulations pertaining to wills and estate planning in the UK are subject to change, and it is essential to consult with a qualified UK-based attorney or financial professional before making any decisions or taking action.
It is strongly recommended to seek personalised advice from qualified legal and financial professionals to address your specific circumstances and comply with current UK laws.