As we grow older, it’s only natural to begin thinking about what the future holds and if you are truly prepared for it.
With the future being so uncertain, you may also begin thinking about the different ways you can look out for and support your loved ones when you are no longer here.
By taking control of your financial, healthcare and other affairs now, you can create a stable foundation for your family’s future.
Protecting your family’s future is a task that may seem intimidating at first. However, with a bit of careful thought and some proactive planning, there are many things you could do to help your family during difficult times.
In this article, we will take a closer look at some of the different ways you can protect your family’s future and ensure they are well looked after for years to come.
Let’s begin!
1) Set up a lasting power of attorney
A Lasting Power of Attorney (LPA) is a legal document that enables you to appoint one or more people you trust as your attorney. Setting up an LPA allows your attorney to make decisions on your behalf if you cannot make them yourself in the future, or if you do not want to make decisions for yourself.
The best part of setting up a Lasting Power of Attorney is that the process is relatively easy. You can even set up a Lasting Power of Attorney online provided you’re over the age of 18 and have the mental ability to make decisions for yourself.
There are two main types of Lasting Powers of Attorneys – a Health and Welfare LPA and a Property and Financial LPA. By setting up a Lasting Power of Attorney, you ensure that someone you trust is able to carry out your healthcare and financial wishes when you are no longer able to do so.
2) Make a will
Making a will may seem a bit emotionally harrowing at first. However, it is a step you ought to consider if you want to look out for the best interests of your loved ones later on.
Your will expresses how you want your property, possessions and financial assets to be distributed after you are no longer here. By making a will and keeping it up to date, you can pass on your belongings to your near and dear ones and minimise family conflicts.
Writing a will is one of the best ways to safeguard your family’s finances for years to come. When you write a will, you can make it as detailed as you want. For example, creating an inventory of your financial assets, like bank accounts or life insurance policies, will help your will executors easily locate them when the time comes. Additionally, you could also write a letter of wishes on the exact details of how you wish to distribute your money to your loved ones.
Of course, making a will is not just about securing your family’s financial future. It also allows you to appoint a legal guardian to look after your children (if they’re below the age of 18) in the future to ensure they will be well cared for.
3) Gift assets and money to your family
If you wish to minimise the amount of inheritance tax payable on your estate after you’re no longer here, you could gift your family members some of your assets right now.
You can gift your children, grandchildren or another person up to £3,000 without having to pay any Inheritance Tax (IHT). This is known as your annual exemption.
Moreover, if you do not use your full exemption in one tax year, it will be carried over into the next year. As such, you can gift up to £6,000 tax-free within two years.
4) Get life insurance
Life insurance is a big aspect of financial protection and security and can help provide a vital lifeline to your loved ones upon your passing.
Whether through an individual or joint policy, life insurance provides a lump sum payout that can help your family during their time of grief.
A life insurance policy helps alleviate financial strain on your family and ensures their living expenses and educational pursuits remain unfettered during difficult times.
With economic difficulties, more and more people are becoming aware of the need to protect and safeguard their families’ financial future. However, securing your family’s future is a diligent process that requires careful thought, thorough planning and legal guidance.
From drafting a will to setting up lasting powers of attorney, there are various steps that you could take to protect your loved ones as well as yourself. The key is to not only focus on the initial creation of your estate planning but also remember to adapt and update it to life’s changing circumstances.
With the right approach, you too can ensure that your family is well protected in your absence and provide them with much peace of mind.