Wealth Planning -
Creating certainty in an uncertain world
Nick Gornall, Head of Business Development shares his thoughts on controlling the controllable – and making sense of the madness right now.
After a year like no other and with change the only consistent factor, it’s important to take stock and reflect on our lives, loves and interests. It feels more important than ever before to protect the things – and people – we love with personalised wealth planning.
Preparing for the unexpected
COVID 19, unsurprisingly, prompted many of our clients to consider those close to them who are – or may become - vulnerable, and put in place provisions to help them.
A Lasting Power of Attorney, which is a cornerstone of good wealth planning, allows you to nominate an individual to make decisions on your behalf should you lose mental capacity through accident or illness. There are two types - one for property and financial affairs and one for health and welfare. Often the same attorney(s) are appointed for both, but you can have separate attorneys for each if you prefer. By exercising control over who can make decisions on your behalf, you can feel confident that your arrangements will be taken care of, rather than relying on a court appointed deputy who will make decisions based on limited knowledge of your wishes.
Estate planning, which can often be side lined, is now a more prominent consideration for many of our clients. It’s worth remembering that if your assets are over the current nil rate band of £325,000 (£650,000 if you are married or in a civil partnership), the remainder of your estate is potentially taxed at 40%. Therefore, it has triggered wider family discussions as well as legacy planning to protect wealth and provide financial support to beneficiaries when they need it.
Since the end of the transition period on 31st December, you will need to give further consideration if you wish to live, work, study or travel for business in the EU for more than 90 days. Changes to the tax and succession on assets and property held outside the UK may also impact you. Even divorce law has now changed with the potential for a race to court to issue proceedings in any number of European states a real possibility.
For Investment Managers, the impact on sterling is fundamental, suggesting the need to review both strategic allocation to UK assets and tactical opportunities at play in markets as we adjust to the new world order.
A common observation is that with low interest rates it is a good time to borrow, but commercial investment opportunities right now are quite uncertain. Many of our clients are no longer simply looking for income yield, but looking for propositions that can be converted to residential and have a development value. Lenders across the market are currently more attracted to such lending opportunities with many players uncertain about commercial property lending.
Protecting the family
This is the conversation we have time and again with clients. It’s human nature to want to protect those you love, and while you can’t protect them against everything, having adequate protection in place can be used to support a spouse, partner, or dependents. In the event you are unable to work due to unforeseen life events, you can provide an element of financial certainty at an otherwise uncertain and emotional time. Life cover, for example, debt protection can cover financial liabilities against the consequences of death or serious illness (i.e. redemption of a mortgage on first death or contribution to reducing debt via a critical illness payment). Taking this out in your younger years and when you have no health considerations can be relatively good value for money. A guaranteed whole of life policy in trust can be used to protect your legacy and partially mitigate their inheritance tax liability.
Good financial advice is important – but actually putting these things on your to do list is quite another. I always suggest you should give your financial plans, including your will, a full health check every three years as a minimum, or, more importantly, as a result of life-changing circumstances.
Becoming a client
Take control of your finances today by completing our enquiry form. Alternatively, you can call us on the number below and one of our team will be more than happy to talk about your future.