Tips on financial planning

What is estate planning?

Estate planning allows you to define who will receive what from your estate; it also lets you protect your assets from the claims of those people whom you do not wish to benefit.

Even if you aren’t the main breadwinner in the family or you feel that you have insufficient assets to warrant any form of estate planning, you still need to plan financially for death.

Why plan financially for death?

A few good reasons why financial planning for death pays off

  • Careful estate planning helps provide for your loved ones and next of kin when you are no longer around for support, thus enabling them to maintain a similar standard of living, after your death
  • A savvy approach to your finances - sooner rather than later - provides peace of mind, particularly where inheritance tax, life insurance and pension plans are involved
  • Estate planning in the form of making a will ensures that any money, property or assets you leave behind go directly to the recipients of your choice – not to the state or to other relatives who may suddenly decide to make a claim
  • Having a handle on your finances gives you total control over your financial situation – even from beyond the grave! Put it this way, now’s the time to make sure that you have the financial upper-hand, where the final distribution of your estate is concerned
  • Tips on financial planning for death

    Estate planning is not as difficult as you may think, provided you take a step-by-step approach to structuring your personal financial plan.

  • Adopt a systematic approach to financial planning for death; break the process up into simple tasks; keep records, use spreadsheets. Keep both written and computerised records that identify all of your assets.
  • Create a single list containing a summary of all bank accounts, pensions, insurance policies, life insurance, shareholdings, funeral plans and other financial documents (invaluable for anyone involved in sorting out your financial affairs after your death)
  • Make a will: Making a Will is a fundamental part of estate planning as it is used to define who will benefit from the distribution of your assets, following your death
  • Engage the services of an independent financial advisor who specialises in offering advice and tips on estate planning. Your advisor will assess your overall financial situation, including income, assets, expenditure, insurance policies, property, inheritance tax, investments, etc. and help you formulate the best financial plan for your circumstances
  • Top tip for inheritance tax ‘avoidance’

    Do you have assets worth more than the Inheritance Tax threshold (currently £325,000)?

    If so, careful financial planning for death is the best way to ensure that your beneficiaries don’t miss out. With sensible planning, it’s possible to use the Inheritance Tax rules, legitimately, to reduce the amount of money from your estate that goes to the tax man (see the Inheritance Tax section of this website for more details).