You might think of wealth management as something that only matters if you have a significant fortune or estate. However, this would be a mistake. Virtually everyone has wealth they should think about protecting. It may be in property, savings, pensions or possessions. The way you manage that wealth can make a big difference to your quality of life in retirement, and to how much of your wealth passes to your beneficiaries rather than the taxman after you die.
Effective later life planning means different things for different people. Circumstances, priorities and needs are unique. So, it’s essential that later life planning is built around individuals and not around specific services or products.
At PowellsLaw we think of later life planning as a three-step process: protect, release, pass on.
Protect Your Wealth
The first step is to protect your wealth and make sure it will be used as you would wish after you die. It’s not just a question of having Wills written, but that they are current, ensuring they are periodically updated to reflect changes in your circumstances or legislation. Trusts can be an effective way to place some of your wealth outside the scope of Inheritance Tax, but these need to be set up with great care if they are to be effective.
It’s also important to make provision in case you lose the capacity to make decisions and manage your finances for yourself. A lasting power of attorney will ensure that your finances, or decisions about your health and welfare are made by somebody you trust.
Release Your Wealth
A large part of your wealth may be in property. It might be that you would prefer to use some of this wealth to pay for a better lifestyle in your later years. If you don’t want to downsize to release capital, you can use an equity release scheme. However, there are implications if you choose this option so it’s important to get professional advice.
Pass On Your Wealth
There are various options that could help ensure relatives or other chosen beneficiaries gain the maximum benefit from your wealth. The objective is usually to minimise the exposure to Inheritance Tax. Trusts and lifetime settlements can also be used to manage how your wealth is released and used by beneficiaries after you die.
Deeds of Gift can transfer ownership of property or other assets during your lifetime, which can reduce the tax liability. And Deeds of Variation can be used to alter the distribution of an estate from the arrangements specified in the Will.
Wealth planning is all about maximising and protecting assets. It can become complex but can also make a significant difference to your quality of life in retirement or the wealth you can pass on. The team at PowellsLaw can advise you on all legal aspects and, if needed, will involve trusted accountancy or financial planning partners to deliver a complete service that meets your individual needs. Contact us today to find out more.