Generational Financial Planning

5 Financial Planning Conversations for you and your Family

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Discussing finances can evoke anxiety or discomfort, and this tension doesn’t ease when family members are involved..

How can you make financial planning conversations go smoothly?

  • Your Estate

Discussing who will inherit will help you avoid future disagreements, ensure your Will is up to date and minimise inheritance tax liabilities

  • Succession Planning

Building a succession plan that suits your needs ensures you have laid the firm foundations for your family’s future

  • Lifetime Gifting

It’s possible to gift tax-efficiently during your lifetime using various allowances and exemptions

  • When I’m gone Information

Discuss where you’ll safely leave basic details of your bank accounts, savings, investments, and utility providers

  • Power of Attorney

You can put in place a power of attorney, a legal document enabling you to name one or more people to look after your affairs if you lose capacity

If you would like to discuss your family’s financial future and how we can help, please get in contact

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After Retirement – helping your loved ones

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Your financial adviser will have helped you plan a secure retirement lifestyle and naturally your thoughts will now be turning to how you can help your family now and in the future. Your adviser will guide you through key stages including 

  • Estate planning 
  • Legislation changes and their impact 
  • Tax implications 
  • Gifting 
  • The role of Wills, Trusts and Lasting Powers of Attorneys 

Your adviser’s role is to ensure you enjoy your retirement and bring expertise into successfully passing on your wealth in the right stages. 

If you would like to discuss your and your family’s financial future, please get in touch.

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Financial Planning conversations you need to have

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Protecting your legacy and boosting your children’s financial security

Discussing finances can evoke anxiety or discomfort, and this tension doesn’t ease when family members are involved. Nevertheless, parents of adult children are responsible for discussing their financial future – particularly retirement and estate planning. Doing so ensures their children can provide support or fulfil their wishes as needed.

Open conversations can provide financial planning opportunities and improve your loved one’s future finances. The sooner you talk about money, the better your chances are of protecting your legacy and boosting your children’s financial security.

How can you make financial planning conversations go smoothly?

Your Estate

Let’s begin with inheritance, which is a hugely emotive subject. While discussing who will inherit a portion of your estate after you have passed away might seem difficult, doing so could prevent future difficulties or disagreements.You can explain your plans and why you have made certain decisions. This could also provide an opportunity to consider if your will needs updating. For example, you might need to amend your will to ensure your estate can benefit from the residence nil-rate band, which could reduce your estate’s Inheritance Tax (IHT) bill.

Lifetime Gifting

Although you’ll want to avoid giving away money that you might need in the future – towards care costs, for example – you might wish to consider passing on some wealth to future generations within your lifetime. Using pensions,Trusts, and life assurance are just some ways you can do this.This can be complicated, but we can work with you to give you peace of mind that you’ve laid the firmest foundation for your family’s future.

It’s possible to gift tax-efficiently during your lifetime using various allowances and exemptions. For instance, you can give away up to £3,000 per year free from IHT. Additionally, you can make small gifts, such as potentially exempt transfers (PETs), become exempt from IHT if you live for at least a further seven years after making the gift.

Power of Attorney

Dealing with a deterioration in mental capacity can be particularly tough on your family. If you can no longer make decisions for yourself, you’ll want to ensure someone you trust is legally in this position. You can put in place a power of attorney, a legal document enabling you to name one or more people to look after your affairs if you lose capacity.Without this document, an application must be made to the Court of Protection (the sheriff court in Scotland), which can be a complex, costly, and lengthy process for your loved ones.

“When I’m gone” Information

Discuss where you’ll safely leave basic details of your bank accounts, savings, investments, and utility providers. Compiling a list of this information is time well spent and could be invaluable to your family if you lose capacity or pass away. Talking to your family about inheritance might seem difficult, but we can help start the conversation and guide your through what may be an emotional process.

Succession Planning

Building a succession plan that suits your needs ensures you have laid the firm foundations for your family’s future. It’s crucial to regularly review and update this plan to adapt to any changes in your personal circumstances or legislation. The planning process leads to understanding each family member’s motivations and personal drivers. This will enable you to assess the direction of your vision and the options available to your family to create a plan for your family’s future.

Will you have a financially secure and fulfilling retirement?

Please contact us for more comprehensive advice on managing your family’s financial future, including estate planning, lifetime gifting, and setting up a power of attorney. We’ll assist you in navigating these challenging discussions and ensuring your financial legacy is secure.

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Free Guide: Estate Planning

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What is the importance of estate planning?

Estate planning is about more than just tax. It is about making sure the people left behind are financially supported, that your assets are protected and that the tax your estate pays is fair.

Wealth preservation and wealth transfer are becoming an increasingly important issue for many families today.

Your estate consists of everything you own. This includes savings, investments, pensions, property, life insurance (not written in an appropriate trust) and personal possessions. Debts and liabilities are subtracted from the total value of all assets

There are various ways to legally avoid paying inheritance tax and we have produced a free Estate Planning guide to support you with Inheritance Tax Planning: Download Here

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Preserving Wealth for Future Generations

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Start your estate and inheritance planning as early as possible and implement in stages

The UK Treasury has been receiving record-breaking Inheritance Tax (IHT) receipts. IHT receipts amounted to approximately £7.09 billion in 2022/23, compared with £6.05 billion in the previous financial year.

For individuals and families who have to pay it, IHT can be emotionally challenging, often requiring the sale of cherished family assets to settle the tax bill. That’s why starting estate planning early and implementing it in stages is essential. Also, having an open conversation about estate planning with family members is very beneficial but depends on family dynamics and wealth levels.

Minimise Tax Liabilities

However, families should take proactive measures to minimise the possibility of facing a substantial IHT bill. By planning ahead and seeking professional advice, individuals can ensure their assets are managed to minimise tax liabilities.

Creating a comprehensive wealth strategy involves considering various factors.

Lifetime Cashflow

We can help you assess your assets and income to ensure we support your desired lifestyle throughout your lifetime. By understanding your cash flow needs, we can assist in structuring investments and creating a sustainable financial plan.

Lifetime Gifting

Gifting can be a valuable tool in wealth planning, allowing you to reduce a potential IHT tax burden. We can guide you on the various gifting allowances and exemptions available, such as the annual gifting allowance, wedding gifts and gifts from normal expenditure out of income.

Trusts

Most trusts offer flexibility and control over how your assets are distributed. They can also help reduce taxes on inheritance. This excludes Absolute Trusts, where control over assets is discretionary. Working closely with us, you can explore different trust options and understand how they can be incorporated into your wealth planning strategy.

Pensions

Pensions are important in wealth planning, offering tax advantages and the potential for long-term financial security. We can help you navigate the complexities of pensions, including risk assessment, accessing pension funds and maximising tax benefits.

Protection Cover

Protecting your loved ones in the event of death or illness is crucial. We can advise on selecting the right protection products to provide liquidity for IHT and other associated costs.

Business Relief

Incorporating business relief into your wealth planning strategy can be advantageous if you own a business or have qualifying assets. We’ll help you understand the eligibility criteria and how to leverage this relief effectively.

Financial Control and Estate Planning

Creating a Will ensures that your assets are distributed according to your wishes. Additionally, appointing a Lasting Power of Attorney provides someone with financial control over your assets and peace of mind if you cannot manage your affairs.

Estate planning is not a one-size-fts-all approach. Although there is no requirement to address IHT, proactive planning can minimise the tax burden on families. Seeking professional advice and taking steps early can help reduce the risk of leaving loved ones with a larger tax bill than necessary.

Do you want the peace of mind of tax efficiently passing on your wealth to your loved ones?

When you’ve worked hard to build up your wealth, you want the peace of mind to pass this on to your loved ones. There’s much to consider, especially if you have a complex estate. Who should it go to? And when? Is it sensible to pass on wealth during your lifetime? To discuss how we can help, do not hesitate to contact us.

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Family Focused Financial Advice

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Often when making financial plans, it can feel like a very individual decision. What you’re actually doing is planning for yours and your family’s future. All families are different. And that’s why it’s really important to involve your financial adviser with the whole family story.

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Planning For a Secure Future

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The journey to financial freedom begins with a roadmap.

To start you can outline your current financial situation and this will pave the way towards your desired destination – your financial goals. It’s time to ask yourself, what are these goals? Saving for retirement, building an investment portfolio or establishing an emergency fund? The more precise your goals, the more tailored your roadmap can be.

Charting your course: the power of goal-based planning

Once you’ve defined your objectives, the magic begins. Goal-based financial planning allows you to invest systematically and in a disciplined way. It keeps you focused on your destination, unswayed by the market’s short-term turbulence.

While everyone’s goals vary depending on their life stage, they can generally be bucketed into three categories: essential needs, lifestyle wants and legacy aspirations.

ACHIEVING FINANCIAL SUCCESS: A COMPREHENSIVE APPROACH

Navigating the terrain of financial success in these areas can be challenging. It demands a holistic understanding of everything from complex retirement plans and investment products to risk management strategies and tax laws.

Your financial roadmap should be your beacon of clarity. It should encapsulate every facet of your vision – your hopes, fears and goals, vividly depicting your financial future.

What are some of the questions to ask yourself?

  • Can I sleep soundly knowing my future is financially secure?
  • Do I have a clear direction for my journey
  • Will my current lifestyle be sustainable in retirement?
  • Am I financially equipped to live the life I want now and in the future
  • Have I planned adequately to ensure I don’t run out of money?
  • Do I fully understand my financial position?
  • What is my financial ‘magic number’ to secure my current and future lifestyle?

The cost of your future lifestyle: Understanding your number

Start by identifying your financial goals and the time frame to achieve them. Determine their current cost, factor in a reasonable inflation rate, and voila – you’ll know what they’ll likely cost when you aim to achieve them. This exercise helps you uncover ‘your number’ – the money you need to secure your future lifestyle without fear of running out of funds.

Your financial roadmap is your guide to making informed financial decisions, striking a balance between current responsibilities and future aspirations. It’s designed to help you sustainably achieve your lifestyle goals and objectives over time.

We have produced a comprehensive guide to help you build a more secure financial future. To download your free guide, fill in the form below:

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Talking about inheritance

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Time to talk: Have you talked about your Will?

  • 57% of parents haven’t spoken to their adult children about their Will
  • 24% of adults haven’t discussed making a Will with their partner or spouse
  • 49% of adults admit talking long-term finances with family is difficult
  • of parents feel responsible for their children’s financial wellbeing if they were to pass

If you would like to speak to one of our Estate Planning Specialists on making a Will, then please get in touch.

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Writing a Will

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Statistics show that 22% of adults aged 75 years and above have no will, along with 39% aged between 65 and 74.

Having a Will in place is essential to ensure your estate is passed down to who you want it to. If you would like more information and guidance on making a Will, please get in touch.

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Wills and Inheritance Tax

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Wealth transfer has become an important issue for many families today. Individuals with assets of any size should prepare for their eventual transfer whilst making provision for any tax or legal consequences.

But more than half of parents (57%) haven’t spoken to their adult children about their Will, according to new research[1]. Nearly a quarter (24%) of adults haven’t discussed making a Will with their partner or spouse, while almost a third (31%) were unsure if they understood the long-term benefits of putting their assets into a trust or finalising a Will.

Long-term finances

The survey also revealed one in two (49%) adults admit that talking about long-term finances, especially in the event of death, with family members is difficult. When it comes to discussing Wills and trusts with adult children or dependents, over two-thirds (69%) of parents say they feel responsible for the financial wellbeing of their children if they were to pass away.

Despite this, 57% admitted they haven’t talked to their children about long-term finances, while nearly one in ten (9%) parents said they weren’t sure how to approach the topic. The survey finds 47% of people have their children down as a beneficiary of their Will – higher than other forms of support, such as a deposit for a house or flat (19%), a savings pot with regular contributions (16%), or covering the cost of transport, such as a car (15%).

Minimal Inheritance Tax

Parents and guardians should make formal arrangements so that, upon their death, the appropriate plans are in place to ensure the people they wish to benefit from their estate will do so, with the estate settled as quickly as possible and with minimal Inheritance Tax.

If there is no Will, the deceased’s estate will be distributed under the terms of law, which may not align with their loved one’s wishes. Receiving the right professional advice and setting up a financial plan can ensure you are best able to look after your family when the time comes.

Giving peace of mind

With so many different options, it can be overwhelming. The research found that two-thirds of adults (69%) understand the long-term benefits of finalising trusts and Wills, but that still leaves many who don’t.

It’s important to have plans in place to protect your assets and loved ones, today and in the future. It might be difficult to think about, but it ensures your wishes will be met, giving you peace of mind. The outcome of not having a Will or trust in place can be costly – so knowing the difference between Wills and trusts, and putting them in place appropriately, can provide vital benefits.

Wealth and assets

When looking to leave assets to family members, Inheritance Tax is a key consideration. Effective estate planning can help in ensuring your wealth and assets go to your loved ones. By setting up a trust you can effectively put the money outside of your estate, which could be efficient for Inheritance Tax purposes.

Assets held within a trust do not usually form part of your estate upon death, provided that you live for seven years after placing the assets into trust. Therefore, it’s likely they won’t be liable to Inheritance Tax.

Understanding the options

Effective estate preservation planning could save a family a potential Inheritance Tax bill amounting to hundreds of thousands of pounds. Inheritance Tax planning has become more important than ever, following the government’s decision to freeze the £325,000 lifetime exemption until April 2028, with inflation eroding its value every year and subjecting more families to Inheritance Tax.

Over half of Britons (57%) believe it’s important to seek financial advice when it comes to long-term financial planning, which is absolutely right. Seeking advice from a professional ensures you fully understand the options available, and recommendations are made in line with your requirements, giving you peace of mind.

Inheritance tax planning services

Are you looking to pass on more of your wealth in the most tax-efficient way? We all have different objectives in life and need different strategies to help achieve them. We can help you build a strategy that provides financial support to your family and helps you pass on more of your wealth in the most tax-efficient way – please get in touch with us for more information on our estate planning and inheritance tax planning services.

Source data: [1] The research was conducted by Opinium Research and surveyed 2,000 UK adults between September 5-13, 2022.

Important Information: Inheritance Tax planning is a highly complex area of financial planning. Information provided and any opinions expressed are for general guidance only and not personal to your circumstances, nor are intended to provide specific advice. Professional financial advice should be obtained before taking any action. Inheritance Tax planning is a highly complex area of financial planning. The financial conduct authority does not regulate Inheritance Tax planning.

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