Spring clean your personal and financial affairs in lockdown

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Comment: Why being in lockdown is a good opportunity for a spring clean of your personal and financial affairs by Tim Snaith, Partner, Private Wealth at Winckworth Sherwood

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Q1 2020 hedge fund letters, conferences and more

With spring in the air, and perhaps with more time on our hands during the evenings and weekends due to the lockdown, now could be a good time to perform a spring clean on your (and even your family’s) personal and financial affairs.

Spring Clean You Personal And Financial Affairs

Below are five of the key actions you may wish to consider:

1. Draft or check your will

When did you last review your will? Have there been any changes in your circumstances including marrying, having a child, bereavement or the break-up of relationships which could have an impact? You should consider whether any named executors and guardians remain appropriate, and more broadly, whether the terms continue to sit in line with your wishes. If you haven’t got a will, now would be a suitable time to set one up.

2. Don’t ignore your pension

Regularly check your pension and how it is allocated. If you are fortunate enough to have accumulated multiple pensions over a career, check they are in line with your overall financial aims. If you have one, reach out to your financial adviser to undertake a wider review. You should also consider whether you have made any Death Benefit nominations. Your pension wouldn’t normally pass under the terms of your will, and yet it can still represent a significant share of your assets. Pension providers rarely chase you to update these nominations, so it is important to review them, particularly if you are reviewing your will.

3. What about life insurance?

Do you have death in service cover with your work (often employers will pay a multiple of your salary as a lump sum in the event of your death)? If so, consider completing a Death Benefit Nomination form to confirm who you want to be considered to receive any lump sum benefit. This could be a family member, a friend, a charity, a business or any other organisation, and will provide an added peace of mind. If you have an independent life insurance policy, when did you last review it? For example, are you paying over the odds? Is the cover enough or are you paying too much? Has the policy been assigned out of your estate (without this, you can end up paying unnecessary inheritance tax in the event of your death)?

4. How about digital assets?

Do you have a full overview of all your digital assets? Have you considered how loved ones might obtain access in the event you cannot? Perhaps it might be time to set this out. The internet is less than a generation old, meaning that the systems and processes offered by companies to deal with death or loss of mental capacity vary wildly and, are often inefficient. It is worth making a plan and keeping key family members involved.

5. Set up a Lasting Power of Attorney (LPA)

Do you have up to date Lasting Powers of Attorney? These are documents to deal with issues arising out of a loss of mental capacity. Mental incapacity may arise at any age whether it is due to an illness such as dementia or an accident. Having these powers in place, however unlikely it is that they are needed, can save a lot of stress and anxiety for family members.

It is also imperative to think about your family. If you have elderly parents, when did they last undertake a similar review? If you have adult children, do they have their affairs in order and have they thought about the above?

There can be no doubt, death and taxes are far from happy subjects but remain two of the few certainties in life, so grasping the nettle now (and at least once every five or so years) should hopefully go a long way to ensuring the right result, even if not required for many, many, years to come.

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About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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