Better than joining the gym and longer lasting than a diet, getting your 'life admin' in order is the New Year resolution that will truly benefit you and your family. So, get 2019 off to a good start by considering the following and setting some achievable goals.
Get on top of your finances
With our bank balances taking a hit from Christmas and the New Year sales, now is the time to get on top of your finances. Effective tax planning can not only maximise your income and improve your saving options, but also preserve your wealth for your family.
With the end of the tax year not far off, make sure you take advantage of the many different allowances you might be entitled to - you don't want to find yourself paying more in tax than needed. For example, ISA's allow your capital to grow tax-free (the current adult allowance is £20,000 while children can save up to £4,260 in a Junior ISA). Contributions to your pension also attract favourable tax treatment so you can top up your pension pot before 5 April 2019 to make full use of your annual allowance.
When it comes to planning your finances and investing Anderson Strathern Asset Management can provide independent financial advice tailored to your circumstances. Read our top tips for managing your personal finance from our Private Wealth Managers for more information.
Ensure help is at hand
No one likes to think about not being able to do things for themselves, or 'losing capacity'. However, the chances are we will all need a little help in life at one stage or another, and putting a power of attorney in place ensures that you can get the right help when you need it most.
A power of attorney allows you to select the people you trust and give them the authority to act for you in certain circumstances. This can range from simple things, such as having someone pay the bills while you relax on an extended holiday, to more difficult scenarios, such as making decisions for you about your care when you are no longer able to make these choices for yourself.
A power of attorney can also sit alongside an Advance Medical Directive or 'living will' which allows you to set down your thoughts on how you might wish to deal with an illness in the future.
These documents can, however, only be prepared when you are fit and well, so we recommend putting them in place as early as possible. This creates certainty for the future and can alleviate stress on loved ones at difficult times.
When there's a will there's a way (to help your family)
Putting a will in place allows you to have more control over the destination of your estate and ensure that your loved ones will benefit in the way that you want them to.
However, more than half of the UK population do not have a will, meaning that their estates risk 'falling into intestacy'. The result for Scots is that any assets will be distributed according to a strict set of rules which have not been updated since the 1960's. These rules are often seen as 'old-fashioned' and do not take account of modern family structures. For example, step children are not catered for and cohabitants have very limited rights. The intestacy rules mean that many family members run the risk of being disinherited or receiving less than they might otherwise have expected. Having a will, on the other hand, ensures your wishes can be followed.
Preparing a will also gives an ideal opportunity to consider inheritance tax planning and wealth protection options. These allow you to not only maximise the benefit that your family receives from your estate but also to ensure it is safeguarded for the future.
And if you own a family business you may also want to consider putting a succession plan in place for the next generation, read our great expectations article for some useful information on transition planning for a business.
What if I already have a will?
You may already have a will in place, but when was the last time you reviewed it? If you will excuse the pun, a will should be treated as a 'living document' and kept up to date as life events occur.
We recommend that wills are reviewed periodically and, at the minimum, when there is a birth, marriage, divorce, or death. So, dig your will out of storage and read over it. Check the beneficiaries - have there been any new additions to the family (e.g. children, grandchildren, etc.), since you last signed your will? Does it still reflect your wishes today? If not, you should get it updated and restore your peace of mind.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.