Human beings are strange. We secure all our assets including our home, cars, and boats. We use banks and safes to protect our valuables. We insure our personal possessions against things such as fire, damage and theft. In the main, it’s incomprehensible for us not protect all our material possessions. Yet through ineffective planning, we subject our entire estate and family’s security to all sorts of risks. These risks include destructive taxes, mismanagement and downright neglect.
“The Art Of Living And Dying Orderly”
New Zealand epitomises the free world with our basic freedoms –
- To work wherever you want.
- To own the property you desire.
- To accumulate, enjoy and to donate during your lifetime.
Taxes, bureaucracy, laws and societal changes threaten these basic freedoms. But the largest threat is our resignation and neglect in the area of wealth planning.
On average, we spend 80,000 to 90,000 hours between the ages of 20 and 60 trying to accumulate wealth. Yet most of us will spend less than 10 hours in a lifetime structuring a personalised wealth plan. A plan designed to secure, protect and preserve our wealth. Added to this is a lack of awareness and understanding of what we need to do, why and how. This is a fatal combination.
Wealth Planning Guarantees –
- You and your family are not left as “hostages to fate”.
- The security of your family home.
- The protection of your assets during your lifetime.
- The transfer of your assets to your ultimate beneficiaries.
- A continuing standard of living to meet your family’s requirements.
- An end family turmoil and disputes.
- To minimise the destructive effect of taxes, penalties 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.
- Adequate funding to meet the cash demands against your estate.
- Security for your loved ones.
The cement that holds your wealth planning together is a simple, basic will. 80-85% 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. Plus it can provide peace of mind for all concerned.
7 Key Phases Of Effective Wealth Planning
1. Commitment To Getting It Done
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 short of the mark won’t achieve anything. It will only cost you time and money.
2. Choosing Your Advisors
Make sure you have the right advisors for the job, and that they are “on your team”. This means they have your best interests paramount, and not those of any suppliers they may have. You’ll want to make sure your advisors look at the whole picture so that each part of your planning fits together.
3. Finding Out What’s So
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 on the outcomes you want to achieve.
4. Discovering The Problems
Identify all existing problems and potential problems. 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. Identifying Solutions and Strategies
Make sure your advisors find solutions to existing and potential problems. You’ll also need strategies to deal with each issue. This can seem daunting and it’s helpful to have clear and simple steps to follow. In this way you can move forward with confidence.
6. Getting Things Put In Place
It’s vital you put in place the solutions and strategies you have identified. This could be as simple as signing your will. Or it could be a more complicated and extensive strategy (which is where the simple steps come in handy). One thing is sure – your planning will amount to nothing if it’s not implemented.
7. Regular Reviews
Wealth planning is not “set and forget”. You need to review your wealth planning structures whenever your circumstance change. Even if things remain the same, you’ll still need to review your planning from time to time.