Safeguarding the current and future lifestyle of you and your loved ones isn’t simply a matter of wise investment. Planning for the future means asking some big questions about where you are now and where you want to be.
So, how do you chart a course towards a more certain future for yourself and your family?
Go back to basics
Before getting into the details of your assets, liabilities, income and outgoings you need to remind yourself of what you want to achieve and what’s important to you. It’s about articulating your personal goals. For example, do you want to retire in five years’ time? Would you like to move abroad? Is there a personal project you’d love to focus on?
When you’re clear about your aspirations – for your family as well as yourself – can you start to plan how to achieve them, always bearing in mind the ‘winds of change’ that might blow you off course.
Know your worth
Cash-flow may not currently be an issue for you, but prepare yourself. Many wealthier families are surprised when they take a closer look at how much they spend. Be thorough when analysing the net value of your estate and cash-flow. Don’t kid yourself!
Think about the unthinkable
While it’s impossible to plan for every eventuality, there are some scenarios you need to consider to ensure your plans aren’t completely derailed. These are the hard questions to face. How will your family fare if you’re not around? What happens if your company fails or you lose your livelihood?
You need to weigh up your Will as well as insurance options – not just to give yourself and your family basic reassurance, but to ensure their standard of living can be maintained. Think about medical insurance, income replacement and life assurance for you and your spouse.
Don’t put off the Inheritance Tax question
There is no escaping death or taxes. Inheritance Tax (IHT) planning can certainly mitigate some of the burden on your loved ones. Particularly, given the rate of tax is set at 40% on an estate above £325,000 on death.
Making significant lifetime gifts and surviving seven years from the date of the gift is perhaps the easiest route to lowering the IHT bill. However, you need to be clear on how much you can afford to give away without affecting your current standard of living and without ‘spoiling’ your children/grandchildren.
Be smart with your specialists
Whether drafting a Will, creating trusts or buying overseas property, your plans may be complex and multifaceted. You may already have a family lawyer, an accountant or tax specialist that advises you. However, you need to be sure that they have the breadth and depth of experience appropriate to your current level of assets and your current needs.
At HSBC Private Banking, we have the knowledge and experience to understand your goals and help you plan to achieve them.
If we’ve sparked your interest in structuring your wealth for the future and you’d like to find out more, please head to www.hsbcprivatebank.com.
“There are some scenarios you need to consider to ensure your plans aren’t completely derailed”
“You need to remind yourself of what you want to achieve and what’s important to you.”