What’s the plan?

A desire to engage in tax or estate planning is typically driven by a particular event that forces one to consider both one’s own future and the welfare of dependants.  It may be that one loses their parents, one sells a business or otherwise one goes through a major life event which makes mortality more of a serious consideration than it may have been before.

While it is only natural that planning is instigated by such an event it is not particularly healthy to act in any sort of knee jerk fashion or to try and rely on the momentum generated by that event to carry the process though.  Fundamentally planning is a journey and, like any journey, one needs to know from where one starts and the destination to which one is proceeding.  This will allow the development of a route to follow.

In previous articles I have discussed the importance of professional advisors working together for the benefit of a client. Consider your solicitor, financial advisor and accountant to be the co-pilots in this journey.  It is they who should be working together to help you to develop your route, or strategy.

One of the most powerful tools in developing this strategy is financial planning, and more particularly cash flow planning.  A quality financial planner can assist you with this, using powerful software and their own skill and experience to help chart out your financial future.  This will not only demonstrate what you might consider giving away for tax planning purposes or how your wealth can be best used for events in later life, but I have seen clients be advised that they can retire from work significantly earlier than they had believed, much to their surprise and delight.

A good overall strategy is set by professionals working together.  It does not consider only money but also the health and welfare of all the relevant people on the journey.  You might be driving the car and your advisors may be your co-pilots but your passengers are very much those people you care about, such as your spouse or partner, children, grandchildren and anyone else who depend on you.  This is, after all, quite a large car.

When the urge to start making plans strikes, the best advice is to sit down with one or more of your professional trusted advisors and explore the immediate steps and also start to develop the overall strategy.  It is much easier to get the strategy right at the outset and follow a well considered plan than try and u-turn and change later on.

• James Hall, Managing Partner