Richard Porter IFA St Albans - Get financial advice for your estate planning

Thursday 22 December, 2016

Richard Porter part of our St Albans financial planning team reviews how important it is to get independent financial advice for estate planning

Richard Porter, independent financial adviser, St Albans said:‘Our recent estate planning seminar highlighted the requirement for our clients to get personalised financial planning advice.  Everybody has different financial circumstances and issues that must be considered before we offer independent financial advice.’

Estate planning case study – Mr & Mrs J

Age 73
Main residence valued at £400,000
Investments worth £480,000
Cash savings £110,000
Current annual income £30,000 from a defined benefit pension scheme 
as well as a state pension for Mr & Mrs J

Mr & Mrs J had the following 3 questions:

1. Can we maintain the same lifestyle for the rest of our life?
2. Are we able to gift money to our children?
3. Wil we be able to afford nursing care?

Richard Porter independent financial adviser, St Albans said:

‘Some of the questions that Mr & Mrs J want answers to are typical of issues that our retired clients face.  Although none of us know how long we are going to live we can use actuarial calculations to assist us with financial planning.  We then recommend our clients use cash-flow modelling to gain a better understanding of how their assets will last in retirement.’

Mr & Mrs J’s financial information was input into their own Lonsdale Lifetime Financial Planning Model.  We also asked the couple to consider how much their current and future expenditure was likely to be.  After making assumptions for investment growth and inflation we provided the couple with financial planning forecasts that answered their original questions.

Richard Porter, independent financial adviser, St Albans said:

‘When we ran the cash-flow modelling and reviewed future spending plans Mr & Mrs J had a cash-flow surplus each year, which proved to them that they had the income to continue to maintain their lifestyle.  As an option the couple could gift the surplus income to their family each year to reduce any potential inheritance tax liability.  By using cash-flow modelling we also demonstrated to the couple that based on their savings and investments they could afford to gift £100,000 to their children now, and still both afford nursing care from age 80 if they sold their property in future.’

Estate planning case study summary

Having set up their Lifetime Financial Plan Mr and Mrs J now feel confident to gift money to their children. They will meet their independent financial adviser regularly so their Lifetime Financial plan can be reviewed and amended if necessary. 

The couple can see from the cash-flow forecasts that they have enough income to maintain their lifestyle in retirement.  Their property and other assets will pay for nursing care costs if necessary.

Cash-flow, tax and estate planning is not regulated by the Financial Conduct Authority.

 

Latest News Next Article Previous Article