Being part of the “Sandwich Generation” is no picnic in the park. With dependent children as well as ageing parents, prudent financial planning has never been more important. A good financial planner can help you plan for your retirement by giving advice on pensions and annuities provide advice on long term care planning and recommend ways to manage your monies in a tax efficient manner.
In terms of topics that families find awkward to discuss, sex and finances are high on the list; discussing finances between the generations in order to ensure that necessary plans are in place is uncomfortable for many people. However, if nobody is clear on what their older relatives can pay for in terms of care, it puts an emotional and financial burden on families. Openly talking about money can be easier than expected; and there is a huge benefit as it can help make informed decisions.
With an increasing ageing population, the sad fact is that the number of those with dementia and Alzheimer’s disease is ever rising. According to statistics from the Alzheimer’s Society there are now 520,000 people in the UK with the disease, and many families are making decisions as power of attorney, without prior knowledge of what their relative really wants.
If you are fortunate to inherit money and assets from parents or other relatives, you will need advice on dealing with probate, man trusts and investing the legacy in the best and most tax-efficient way. This can be a catalyst to undertake a review of your own estate planning needs to ensure that your will and other arrangements are still appropriate. You may need advice on trusts, passing on business assets and minimising your inheritance tax bill through using exemptions and reliefs.
So how can we encourage more discussion on finances?
- Commit to having an initial conversation, ensuring goals and values are understood and family wishes are clear.
- Remember that financial planning affects the whole family – whether that be estate planning, making a will or ensuring you have power of attorney in place, establishing trusts or transferring assets. This helps the younger generation with their financial planning, as well as helping them understand the resources that the older generation have available for their care needs.
- Explain the benefits to planning. Planning can prevent the loss of assets if a nursing home is needed and help avoid unnecessary taxes being paid if there is no will or estate planning
- Financial education – our current education system does not provide the younger generation with sufficient understanding of how finances work. Talking openly about finances with your children can assist; ensuring they are financially literate will help them to better understand the options for the future.
- A Professional Wealth Planner can co-ordinate a meeting with the wider family so that they are fully prepared and build a long standing relationship with the whole family to help advise them on their financial plans.
If you would like to chat to one of our team about how we could help you start the family conversation, please get in touch.