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Serendipity

I think it’s a lovely word and I experienced it this week. I was delivering a retirement course and was discussing health with the attendees.  What's that got to do with money or serendipity you might ask, well let me explain.

When making financial decisions about retirement, whether or not to take cash out of a pension fund or what level of income you need, it would be good to have an idea about how long you will live. The longer you live, or expect to live, the more you must consider your increasing bills and the more attention you should pay to inflation.

We clearly can never know "how long we have got" Research indicates that three out of every five 60 year old men will live to 85 and its 87 for ladies. This could be a conservative estimate.
 
Knowing then that you will probably need income from your capital and pension funds for a very long time, this should influence your decisions on how you invest and how much you spend now. Is it really a good idea to "blow" your hard earned funds on new cars and first class travel and then struggle to make ends meet for the next twenty years or more?

The subject caused quite a debate and various arguments were put forward.
These days if your pension funds are a reasonable size you may have to get your IFA to "sign off" any action you wish to take. This is because the government and the regulator want you to use the new pension freedoms to your best advantage, and not make any decision without having fully considered its outcomes or the alternatives.
 
Your IFA should know all there is to know about you, your financial situation and your objectives. They can then advise you on your best course of action.
If after having all the risks explained to you and put in writing you still wish to proceed against their advice you can but it is now going to be your responsibility. There will be no redress against the IFA or your pension provider.

On returning to the office I was asked to speak to a 56 year old client who wanted a large cash sum and a very high income from her pension fund. This would run her fund down to nothing very quickly indeed.

Having spent a good chunk of the previous day discussing just this subject I was well practised in explaining the situation and helping her understand what was best for her future. We agreed on drawing a very modest lump sum now and a level of income which should be able to increase as time passes.

Quite serendipitous really!

If you would like further details contact Georgina on 01277 630873


Probate explained

Aside from the immediate practicalities and the emotional strain, the death of a loved one means sorting out financial affairs.

Probate is the result of the legal process whereby the executor winds up the financial affairs of the person who has died and divides up their estate in accordance with their will, paying any inheritance tax due.  In many cases where there is land or shares, a Grant of Probate will be necessary.

What happens during the process?
The executor will need to investigate the extent of the assets and liabilities of the person who has died.  These details will need to be recorded on an inheritance tax form (whether tax is payable or not).

Once Probate is granted, the executor will be able to deal with the deceased’s bank accounts, pension providers, investments companies and transfer any property.

What if the person I am acting for died without a will?
In many cases you must prove that you can act for the person who has died and to do this you will need to apply for something known as a Grant of Letters of Administration.  Banks and other institutions will need to see this document.

Who inherits when there is no will?
There is a strict hierarchy of who inherits when someone dies without having made a will:
Spouse or civil partner (note that unmarried partners are not included)
Children, grandchildren, great grandchildren
Parents
Brothers or sisters or their children
Half brothers or sisters or their children
Grandparents
Uncles or aunts or their children
Half uncles or aunts or their children
Finally, if there are no known relatives, the state will take.

Why do I need a lawyer to help?
Probate can be lengthy and time consuming.  A good solicitor will not only do the practical things, such as prepare the papers required for Probate and make an application to the court on your behalf, but will also explain the process clearly and guide you through the many pitfalls.

For help with probate, making a will or any aspect of estate planning, contact Lorna Boorman on 01268 824926 or email lorna.boorman@birkettlong.co.uk