Why your clients need to start the estate planning process, no matter their age or health status

Last month, you read about how your investor clients could benefit from professional guidance in a time of market volatility.

Now, as we head into the summer, it appears that your clients’ wealth will still be subject to uncertainty. Inflation continues to rise, and the cost of living crisis continues to place a strain on households.

Indeed, since the spring of 2020, your clients may have had increasing concerns about protecting their wealth from the effects of world events. The Covid-19 pandemic sent the world economy into a downswing and, according to the Office for National Statistics (ONS), increased the number of business closures by 50% in the year to Q3 2021.

What’s more, of course, the pandemic saw deaths and serious illnesses rise significantly. Your clients may be wondering what might happen if they passed away unexpectedly, and how their family would fare in this instance.

If your clients don’t have the essential documents in place that could protect their estate in the event of the unexpected, their wealth could be subject to higher tax when they pass away. Plus, their family could be met with stressful administrative issues if your clients don’t have the relevant plans in place.

Here’s why your clients should begin the estate planning process now, no matter their age or health status.

The Covid-19 pandemic has taken the lives of people of all ages

If you have clients approaching old age, it may be that they have already begun the estate planning process.

However, research from Canada Life shows that 65% of 45 – 54-year-olds in the UK have not written a will. In the same study, 51% of 55 – 64-year-olds claimed they didn’t have one, either.

It is crucial to emphasise that if your clients hold significant assets and wealth, they should have already begun writing their will. Indeed, nobody is invincible, and it is important to get this document in place as soon as possible, especially during a pandemic.

According to NHS data, last updated on 11 May 2022, the pandemic has claimed the lives of:

• More than 8,000 people aged 40 – 59
• More than 44,000 people aged 60 – 79.

The pandemic has taught us all to expect the unexpected, and as you can see from the statistics, it is not only very ill or elderly people at risk.

You may often work with your clients to help them overcome life challenges, or to ensure they keep their accounts in order. But if they were to pass away intestate, all this work could go to waste.

Although it is unpleasant to consider, your clients’ wealth could be at risk of falling into intestacy law if they pass away without a will. This means your clients’ wealth would be divided at the discretion of the state, not according to their own wishes.

As we have all learned in the past two years, “now” is better than “later” when clients are putting measures in place to protect their family and hard-earned wealth.

Most people don’t have essential estate planning protections in place – and your client could be one of them

For many people, making a will is the first and last item on the list when it comes to estate planning.

If your clients have already made a will, they may feel like they have done all they can to express how they want their wealth to be divided in the event of their passing.

However, there are other documents and protections that could prove vital in the event of a client’s serious illness or death.

These could include:

• A Lasting Power of Attorney (LPA), which allows an elected person to assume control of your client’s affairs if they become mentally incapacitated
• An “expression of wish” form, which dictates how a pension pot might be divided between beneficiaries
• Life cover in trust, which could help your client’s family continue their lifestyle if your client passed away
• Income protection insurance, which could assist your client in paying their mortgage or other bills in the event of a long-term illness.

These protective measures could be hugely beneficial for your clients, but research shows that many Brits do not have them. For example, Lloyds Banking Group reports that 80% of over-55s don’t have an LPA in place.

If your client doesn’t have these protections to back them up, no matter their age, it could be constructive to explore how these options could help them and their family in difficult circumstances.

Estate planning takes time and patience – and a financial planner can help

Many people want to start the estate planning process, but feel they don’t have the time. Your clients might be in this position – with busy lives and high-pressure jobs, they simply might not have the bandwidth to get their affairs in order.

So, connecting your clients with an experienced financial planner could help them achieve this goal more easily. Working with a planner to complete this process can ensure your clients leave no stone unturned when it comes to protecting their family, and their wealth, against unexpected events.

Get in touch

We’re here to advise you and your clients on all aspects of financial planning. If you have clients that would benefit from guidance, or you’re interested in how you can work more closely with us, please get in touch.

Email enquiries@prosserknowles.co.uk or call 01562 829 222.

Please note

This article is no substitute for financial advice and should not be treated as such. To determine the best course of action for your individual circumstances, please contact us.

Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.