Followers of Martin Lewis may be familiar with the ‘Three D’s’ that he is fond of talking about. The D’s stand for ‘Death, Divorce, Dementia’, and whilst it may sound depressing, it is exceptionally important to remember. We are all familiar with Benjamin Franklin’s phrase ‘in this world nothing can be said to be certain, except death and taxes’. Tax is non-negotiable, and we have no choice over death. We do however have choice over the actions which we take before this happens and unfortunately, divorce and / or dementia, can sometimes precede this event. Below are a few simple tips which address some of the main points surrounding these issues. Not following these points can be costly:
– Write a will. 54% of UK adults do not have a will with 5.4 million people unsure how to make one. One of the reasons we frequently find for not making a will is emotion; people don’t like to think, let alone talk about death. Yet it will happen to us all and if you do not have a will, then you cannot be certain the people you want to receive any inheritance upon your death, will receive it. Become unemotional. An unmarried couple, who neglect making a will, risk leaving the surviving partner with nothing. In complex family situations this can sometimes become very unpleasant and may lead to costly and acrimonious court cases. A simple will is inexpensive and quick to make. Many of the advisers at AEON are members of The Society of Will Writers and can assist with this, or alternatively a solicitor can offer this service too. Whilst ‘DIY’ will packs are available, it is worth taking advice to ensure it is written correctly. An incorrectly written will can be void and thus pointless.
– Make a Power of Attorney (POA). There are many reasons for a power of attorney, but dementia is possibly the one most associated with this. Yet strokes, heart attacks, car crashes are all just as prevalent as this can also cause loss of capacity, both physically and mentally. If you do not have a POA for property and financial matters and you lose mental, or physical capacity, then you will ultimately lose control of your finances, as will your loved ones. There are ways and means (via the Court of Protection) to access your money, but this is costly and cumbersome. Joint bank accounts do not solve the problem, if anything these can be a hindrance.
Health and welfare powers of attorney ensure your loved ones can make choices that you would want them to make, for example, decisions over care plans should you be unable to make them.
– Insure yourself. Recent statistics show 8 million parents in the UK have no financial protection, yet a child loses an adult they depend on financially every 22 minutes. We have no choice over when we die, and this may happen far sooner than may be expected. Whilst we insure our cars, phones, washing machines, houses, so many of us do not insure ourselves. For anyone who has any financial dependents, whether that be a partner or a child, insurance is crucial, especially if there are financial liabilities such as mortgages involved.
– Communicate. With the majority of couples one person is responsible for the finances whilst the other generally has very little idea of these. In the event of death, it is already an exceptionally difficult time, without the added complication of not knowing where financial information is stored. In the event of divorce, it is possible that assets may be concealed or ‘played down’ especially if matters become acrimonious. Communication is key, in order to be able to ensure that should something happen, you are equipped to act appropriately.
– Take Regulated Advice. Regulated advice is very important to ensure you are fully protected and that this is arranged in the most tax efficient way. Sadly, we come across many individuals who have taken non-regulated advice from companies who proclaim to be experts, or tried to ‘advise’ themselves. The mistakes can be costly and sometimes devastating. Taking regulated financial advice provides you with peace of mind, legal protection and can save you a fortune. You can check the regulatory status of a firm and an adviser by using the FCA register: https://register.fca.org.uk/
All our advisers offer an initial consultation at no cost and are all regulated by the Financial Conduct Authority. We also have advisers who are members of The Society of Later Life Advisers (SOLLA), who specialise in the financial needs of people aged 55 and above. To arrange a review please visit our ‘contact us’ page here: https://aeon-ifa.co.uk/contact-us/