When it comes to planning your finances for the future, retirement is not the only consideration. It’s also important to consider what will happen to your estate after your death. Unfortunately, many people don’t put time aside plan for this, which can have serious implications for their loved ones down the line. Drafting a will and letter of wishes is an important start, but you also need to plan your finances to support your will and wishes. Here we look at a number of ways in which you can do this.

Clearing debts

It is a regrettable fact that a number of people will die with unresolved debts. Unfortunately, such debts do not cease on a person’s death if they have assets available. In this instance, individual debts will need to be paid from the deceased’s estate, whist joint debt will become the sole responsibility of the other party.

The responsibility of clearing any outstanding debts will fall to the executor of the estate. This can add considerable stress to an already difficult time. If there is a way in which to reduce personal debts, particularly of any high interest products, this is always advisable to do.

Planning for care costs

Few of us could afford to pay the high cost of long-term care out of our retirement income. It is, therefore, important to incorporate care provision in your retirement planning. This may seem a long way off for some people, but it is worth considering your personal feelings about long-term care and the options available early on. The sooner you make a provision for your care costs, the more you will have available later.

Talking about your future care with your family, who may need to make decisions for you, is also a good idea to make sure your wishes are followed.

Inheritance Tax Planning

There are many ways in which you can organise your finances to reduce the inheritance tax that may be due on your estate after your death. If you have put a will in place, taking steps to reduce your IHT earlier in life can help to support the inheritance decisions you have made in your will.

It may also be the case that you would prefer to distribute certain assets in your estate, such as cash, jewellery or a car, before your death to see the benefits of the gift in your lifetime. This is where estate planning can be especially beneficial. Working with an independent financial adviser will ensure that IHT rules are being followed through this process.

Pension nomination of beneficiary

Many people believe that all of their assets sit under the stipulations they have made in their will. However, this is not the case for pension savings, which can form a large proportion of an individual’s personal assets. Pension investments sit outside of a person’s estate and will be distributed by the pension provider in accordance with the nomination of beneficiary that will have been completed when taking out the pension. For this reason, any time you update your will, it is also a good idea to update your nomination of beneficiary with your pension provider to make sure this matches your wishes.

Talk to us

There are many considerations to take into account when it comes to planning your finances for the future to support your will and wishes. It is, therefore, important to speak to a specialist financial planner to get independent advice on what strategies will work best for you and your family.

PLEASE NOTE: Grosvenor Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority. The Financial Conduct Authority do not regulate tax planning, estate planning, or wills. The value of investment can go down as well as up and you may not get back the original amount you invested. Tax treatment is dependent on individual circumstances and may be subject to change. Tax planning is not regulated by the Financial Conduct Authority.