Financial planning: up and down the generations

If we could, we’d all like to be able to look after our parents, grandparents, children and even grandchildren, ensuring their finances are sound, they are spending enough money on themselves and any money they hope to bequeath is managed in the most appropriate and tax efficient manner possible.

The term ‘multi-generational financial planning’ is a key part of the planning process and works up and down the generational scale.

When planning for their parents, clients shouldn’t be concerned about age. As an adviser for Ascot Lloyd I’m working with a client at age 72 looking after the affairs of his 101-year-old father and 91-year-old step mother who went into care only last year. By creating a plan suitable for this individual client’s needs we have already increased his inheritance by over £100,000 due to
tax planning.

In another case, I have been advising a much younger client who is married with a young son and has had to put their 63-year-old mother into care. Life is unpredictable and you can never know when these events might happen, but if they do it is far better to have a plan in place, or at least know that by having a financial adviser you are best equipped to manage any uncertainties.
Some individuals might not be aware but there are certain complexities involved when looking after an elderly parent, or their affairs. For example, do you know if there is a Power of Attorney (POA) in place? If there isn’t, then you would need to go to the Court of Protection for a Deputyship Order, which is much more expensive to do alone and can be more time consuming.

On the other side of the spectrum you may need to look at the other end of the generation scale to see whether any children or grand- children require financial support. When meeting with your adviser it’s a good idea to discuss this during your review meeting.

In some cases, the plan may not involve the children at all; a solution as simple as saving into a pension and/or a Junior ISA on their behalf can be beneficial for some. For example, did you know that you can start a pension savings plan for an infant child? Many clients favour the idea of putting money away for a child’s future, as a pension cannot be spent until the child reaches retirement age.