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Saving, Spending & Estate Planning

Saving, Spending & Estate Planning

The saving versus spending battle

Most of us spend our lives focused on creating and maintaining our wealth. Our working years are a combination of enjoying the day to day whilst squirrelling money away for retirement. Saving becomes second nature and can be a pretty hard habit to break.

If you’ve planned well for your retirement years, you should be in a comfortable position financially and have choices about what to spend your time doing and how to enjoy your savings. Yet, it’s exactly this that we often see clients finding problematic. After a lifetime of saving, the prospect of spending and dipping into those savings can be quite traumatic!

They say youth is wasted on the young, but for some having money in your senior years feels like a waste. Why didn’t you have it when you were younger and needed it more? Before your health deteriorated or when you wanted to explore the world? At YFP, we love it when we can help clients see that it’s ok to spend and enjoy the money you worked hard to build up.

Whether you want to spend it on yourself or on those around you – all of which is a form of Estate Planning.

Whether you’re a spender or a saver, retirement is typically the time when people start thinking about estate planning, what the future might hold and what sort of legacy you want to leave behind. This thought process is very individual so unique solutions are needed.

Easy as 1, 2, 3?

For us, estate planning starts with a conversation. Easy, right? From our experience, we know this isn’t the case for everyone. “We don’t want to jinx ourselves by talking about it” is perhaps the most frequent comment we hear on the subject. Closely followed by “it’s complicated” and “my family situation isn’t straightforward.”

For the record, thinking and talking about the future doesn’t jinx it and yes estate planning can be complex – not just because of your family situation but also because of the law, tax rules and the fact that nobody  knows when their expiry date will be. All of which makes planning ahead a bit of a challenge! But that doesn’t mean it shouldn’t be done or that it’s not possible.

Why everyone needs an estate plan

So what is estate planning? To us, it’s quite simply planning for your later years (whatever events may occur) and planning how to protect your wealth so you can pass it on in line with your wishes.

To do this we look at the basics such as having an effective Will in place, the benefits of creating a Power of Attorney* and the use of tax allowances and reliefs. We’ll talk to you about what you want to happen in different scenarios including if you get ill, if you need care, whether you want to pass money on during your lifetime or after death. We’ll help you to think about who you want to pass your wealth to and how you want to protect this.

Considering how much you want to pass on can also be a real help with deciding whether you want to save or spend more!

These conversations take time and often happen over multiple meetings. People rarely have all the answers in one sitting and couples often have different views which take more thought and occasionally negotiation! Some people like to involve their family in these discussions, others prefer to only include family once decisions have been made. All that matters is that you reach the right conclusion for yourself.

Why should I plan ahead?

The main benefit of planning ahead is that you can make your wishes known and become a reality. If you want to blow it all cruising the Med or other dreamy retirement destinations, you can do that. If you want to have money to pay for long term care, we can plan for it. If you want to see your family enjoy your money in your lifetime, we can work out how best to make it happen. If you’re happy to leave it all to the local cat home (yes, that will be me!), then that’s also fine and a plan can be made.

The second benefit of planning ahead is being able to make your estate planning as tax efficient as possible so both you and your chosen beneficiaries leave as little to HMRC as possible. Benjamin Franklin had it spot on when he said “In this world, nothing is certain except death and taxes”. I’m yet to meet a client who wants to lose money in taxes.

The final benefit of planning ahead is that you can make it much simpler for your loved ones to deal with after you are gone. At a time when celebrating your life should be the only focus, you can minimize the risk of arguments.

What if I do nothing?

Honestly, doing nothing really shouldn’t be a consideration. If you die without a Will, the Rules of Intestacy will apply meaning that your estate may not pass on to successive generations in the way that you had hoped. You could also lose a chunk of your estate in tax. Why work hard for your money  to then not plan on how to pass it on? Estate Planning is optional, but it is definitely a choice I would make and which I would encourage everyone to make.

In conclusion, saving, spending and Estate Planning is a balancing act. It’s a tightrope to navigate. I see YFP as your safety net. We are here to have the right conversations, to challenge your thinking and ultimately listen to what you want.

We work with you to find solutions that work for you. It is a complex subject which is why we aim to keep it simple and worry about the detail so you can spend your time enjoying all that life has to offer.

For more help and advice or to receive a complimentary guide covering wealth management, retirement planning or Inheritance Tax planning, contact Yorkshire Financial Planning on 01482 275540 or complete our contact form here.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is generally dependent on individual circumstances.

*Will writing and Powers of Attorney involve the referral to a service that is separate and distinct to those offered by St. James’s Place and are not regulated by the Financial Conduct Authority.


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