A real financial planner helps a person to identify the life that they wish to lead at some point in the future, typically during retirement. Part of this entails building a picture of this future life and then analysing which pieces of the jigsaw puzzle are relevant to that future. Analysis of existing assets is undertaken to see whether these assets are the best available to meet future goals; if they are not, they need to be changed.

In a similar manner, a thorough catastrophe analysis has to be undertaken. This might include a thorough cash flow analysis of the situation if one of a couple was to die prematurely – to make sure that they have sufficient assets, such as life assurance, to ensure that they can live without undue worry and financial concern. A real financial planner will be able to calculate how much life assurance is needed, a beneficial process as nobody wants more life assurance cover than is actually required.

As part of this analysis, a review of existing wills should be undertaken. Surprisingly, a significant portion of the population has never taken out a will. Many more have never reviewed their will. There are increasing numbers of second marriages, arising as a result of being widowed or divorced. Many people choose not to marry again. Many people assume that their new partner will inherit many of their assets. Many people assume that their children would automatically inherit. Without a will these assumptions will frequently be very costly mistakes. Put very simply, a will ensures that the right people inherit the right assets at the right time. Do not assume anything; make sure you have an up-to-date will.

Many people also mistakenly assume that if their partner is incapacitated for any reason that they will have the right to manage their assets. This is not the case unless a power of attorney has been set up. Even a married couple needs a power of attorney for both property and financial affairs as well as health and welfare. While they are not easy to set up, they are straightforward.

Not surprisingly, many people choose to ignore taking these steps, hoping everything will be all right. It is, to be frank, a boring but essential administrative task. A real financial planner will be able to assist you in this regard, consulting other legal professionals if and when necessary. They should then be able to help you to ensure that you never ever run out of money in any financial circumstances, even if a catastrophe occurs.

August 2022