The Courier Legal Advice Line
Sensible Financial Planning for the What ifs...?
By Barry Davidson, Chartered Financial Planner, Thorntons Investment Services
As we approach the end of another January how many of us are still observing our New
Year’s Resolutions, perhaps, a ‘dry January’, or going to the gym, or eating healthily?
Congratulations if you are! Studies have shown that the majority of those who set New
Year’s Resolutions have already given up.
My reason for highlighting this fact is not to be negative but to be realistic.
Part of my role when speaking to clients is to ask them to be realistic which often means
playing devil’s advocate and asking what if...?
So my question is...What if your efforts to stay fit and healthy are in vain and you die or
suffer a serious illness during 2014? What would happen to your family and the family’s
finances?
We all routinely insure our homes, cars, phones, holidays etc, but what about our biggest
asset, the one thing that pays for all of these nice possessions or experiences as well as the
basics such as heating and food – our income?
I know it is an unpleasant thought but what would happen to your family’s standard of living
if you and / or your income disappeared because of death or illness? How would the bills be
paid?
If you know the answer and you don’t like it, or if you’re not sure how they would be
affected then make your New Year’s Resolution to speak to a Financial Planner. You may
not like what they tell you but they will help you understand your family’s position and, if
necessary, recommend improvements.
Fortunately, for most people, this can be achieved at a reasonable cost, perhaps even lower
than the cost of a monthly gym membership.
Clearly money cannot make up for the loss of a loved one but proper planning can mean
that it can be one less thing to worry about.
An experienced Financial Planner will talk to you about your current situation. They will
consider your income and outgoings, your mortgage and any other debts, your savings and
your pensions.
They will ask questions to help them understand your individual circumstances and how
these might need to change over the years; will you need to extend your property, or move
to a smaller or bigger home, will your children go to university etc? They will also take into
account any cover you already have, perhaps policies taken out with your mortgage, or life
assurance from your employer. They will explain to you what you’re already protected
against and help you understand the implications of any shortfall.
Pensions should also be examined. Many people now have a variety of pensions because
they have changed jobs. Each one could have different options, for example, they may pay
an increased income on death if there are children still in education or may be able to be
paid out to your nominated beneficiaries’ tax free.
Finally, your wills, do you have one and if so is it up to date? It should always be kept up to
date as your circumstances change.
The outcomes of these discussions will be that you understand your finances and can feel
confident that should anything happen to you that the right money will go to the right
people at the right time.
It’s not too late to make another New Year’s Resolution and review your finances to make
sure your family is protected. Hopefully they’ll never need to rely on it but what
if..................
Barry Davidson
[email protected]
01382 229111
Thorntons Investments is a trading name of Thorntons Investment Management Limited, authorised and regulated by the
Financial Conduct Authority. The value of investments and income from them may fluctuate, past performance is no guide to
future performance and there is no guarantee you will receive back all the money originally invested. Any information
concerning the taxation treatment of a recommended investment or action is based on our understanding of current Inland
Revenue law and practice.