The 7 key steps to remember during wealth planning

We the human species comprise of very curious personalities. We secure all our assets and even use banks and safes to protect our valuables. We go one better and insure most of our personal possessions against such contingencies as fire, damage and theft. In the main, it is incomprehensible for us to not protect all our material possessions. However, through ineffective Wealth Planning, we constantly subject our entire estate and family’s security to all sorts of risks. These risks include destructive taxes, mismanagement and downright neglect.

New Zealand epitomizes the free world with our basic freedoms – ability to work wherever you want, own the property you desire, and accumulate, enjoy and to donate during your lifetime.

These basic freedoms are threatened by taxes, bureaucracy, laws and societal changes. The largest threat to all of us is our resignation and neglect in the area of Wealth Planning. Our basic freedoms – to live, love, learn and leave a legacy – which are so much part of our way of life, can all come to nothing. Let’s not overlook “the art of living and dying orderly”.

On average, we spend 80,000 to 90,000 hours between the ages of 20 and 60 trying to accumulate wealth. However, most of us will spend less than ten hours in a lifetime structuring a personalized Wealth Plan. A plan designed to secure, protect and preserve our wealth. Add to this a lack of awareness and understanding of what needs to be done, why and how. This is a lethal combination!

When performed correctly, wealth planning guarantees the following:

  •  You and your family are not left as “hostages to fate”
  • The security of your family home
  • Your assets are protected during your lifetime
  • Your assets are transferred to your ultimate beneficiaries
  • A continuing standard of living to meet your family’s requirement
  • To eliminate family turmoil and disputes
  • To minimize the destructive effect of taxes, and unnecessary expenditure such as penalties, duties and probate costs
  • Educational opportunities for your most precious asset – your children
  • A structure of support for your spouse, children and other people you care about.

Successful Wealth Planning also ensures adequate funding to meet the cash demands against your Estate. It also provides security for your loved ones.

The cement that holds your Wealth Plan together is a simple, basic Will. We are constantly amazed that 80 to 85% of the business people we contact either do not have wills, or the wills they have won’t do what they want them to. This leaves the way open to potential disputes and distress. Simple, yet careful analysis and planning can avoid ambiguity and provide peace of mind for all concerned.

Effective Wealth Planning Phases

1. Mental commitment
You first need to decide whether you’re serious about your wealth planning or not. If you are serious, make sure you’re going to see it through to completion. Starting, and then stopping half way through or just short of the mark won’t achieve anything. It will only cost you time and money!

2. Selection of advisors
Make sure you have the right advisors for the job, and that they are “on your team”. You’ll need advisors that have your best interests paramount, not those of any suppliers they may have! You’ll want to make sure your advisors look at the whole picture and that each part of your planning fits together.

3. Factual analysis
Get the facts clear about where your wealth planning is up to now, and where you want (or need) it to be. This could entail a complete audit of your current situation. You’ll also need to be clear of the outcomes you want to achieve.

4. Problem identification
ensure all existing problems and potential problems are discovered. You’ll already know what some of the problems are. You may even know what some of the potential problems are. But sometimes the most dangerous problems are the ones you don’t know about.

5. Solutions and strategies
Find solutions to existing and potential problems and identify strategies to deal with each and every issue. The complex world of solutions and strategies can be daunting. It’s helpful to have clear and simple steps to follow. In this way you can move forward confidently.

6. Implementation
It is vital the solutions and strategies you have identified are put in place. This could be as simple as signing your will, or could be a more complicated and extensive strategy (which is where the simple steps comes in handy!). One thing is sure – your planning will amount to nothing if it’s not implemented!

7. Regular reviews
Ensuring you review your wealth planning structures on a regular basis, or whenever your circumstances change.

If you’re not sure whether your Wealth Planning will do the job you want and need it to, you can find out more information by visiting a property manager of your choice.

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