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When should you update your will?

Archive for September, 2023

When should you update your will?

Friday, September 22nd, 2023

Any financial planner will tell you that your will is a vitally important element of your financial plan.

With this legally binding document in place, you can take control of your destiny and be sure that your assets will be distributed in line with your wishes.

But simply writing a will isn’t enough, as your circumstances can change dramatically over time.

So when should you be thinking about updating this vital document, so you can be sure it remains fit for purpose at any given time and reflects your current wishes?

Getting married

If you’ve entered into a marriage or civil partnership, you must update your will to include your spouse or partner. Otherwise, they might not get everything you wanted to leave them if you pass away.

Getting divorced

If you’re coming out of a marriage or civil partnership, you should again update your will, so any references to your ex-partner are updated accordingly.

This is especially important if you move into a new relationship after ending your marriage, but don’t remarry, because if you die, your new partner won’t have any automatic right to inherit your assets.

That’s still the case even if you cohabit with your new partner for many years and have children together. In this scenario, it will still be your ex who has a legal claim to your estate.

Estrangement from a loved one

It may be that you fall out with a close family member who is mentioned in your will and no longer want them to be a beneficiary. If this happens, it’s important to update your will accordingly, so there aren’t any family conflicts further down the line.

Having a child

The birth of a child is the perfect opportunity to revise your will so you can safeguard their financial future in the event of you passing away.

A change in your financial circumstances

Your financial situation could change dramatically without warning, perhaps because you’ve received an inheritance or windfall. Or perhaps you’ve moved into a job with a much higher salary.

In that case, you should look again at your will, as this could make a big difference to how you plan to distribute your assets after your death.

For example, if you find yourself with a much larger estate, you might be more likely to consider leaving some of your wealth to a charity or good cause.

Buying a property

For most people, a property will be the most valuable asset that they own, so if you’re on the housing ladder, make provision for your home in your will so it can be passed smoothly to your chosen beneficiary.

It’s been a long time since you wrote your will

Even if you haven’t experienced any of the life events we’ve described, it’s still a good idea to review your will after a few years, so you can be 100 per cent sure it’s accurate and relevant in the here and now.

At the very least, various laws that affect your inheritance and how it can be distributed may have changed, and that could affect how your estate is distributed.

Ultimately, a will is there to make sure your wishes are carried out to the letter after you pass away, and to make distributing your wealth as simple as possible for your loved ones.

But an out-of-date will can significantly complicate matters and lead to entirely avoidable conflicts arising, along with potentially costly legal disputes – and this will be the last thing you want for your nearest and dearest.

So if it’s been a while since you’ve looked at your will or you’ve gone through major life events in recent years, don’t delay updating it. After all, you never know when it might be needed.

Why asset allocation matters

Friday, September 22nd, 2023

Investing is an uncertain pursuit, as you have to carefully navigate an ever-changing financial climate.

Perhaps the only certainty is that the value of your investments will go up as well as down, so it’s really important that you allocate your assets carefully to help you stay on course.

So what key issues should you be considering when you’re making these crucial decisions?

Exposure to risk

If your portfolio is based around only a few asset classes, you could lose large sums of money if any of these experience a downturn.

It’s therefore really important to diversify your portfolio across many different asset classes, so you can limit your exposure to risk in the event of a downturn and preserve your capital even during the most challenging times.

Maximising your returns

You can achieve higher returns if you optimise your portfolio around the best performing options, so you’re able to take advantage of growth in certain markets and move away from weaker alternatives.

Make sure your portfolio matches your goals

It’s important that your investment portfolio reflects your wider financial objectives. Perhaps you want to send your child to private school or university, or maybe you’re looking to buy a second home or save up for retirement.

By thinking about the spread of your assets through this lens, you can build a portfolio that helps you work towards and achieve your specific objectives.

Adapting as circumstances change

Your investment portfolio doesn’t operate in a vacuum. In fact, it can be affected by countless factors way beyond your control, from economic shifts to political upheaval at home and abroad.

With that in mind, it’s really important to be flexible and adjust your portfolio when it’s appropriate to do so.

However, it’s crucial that you don’t panic in the face of market movements, as making impulsive decisions could backfire on you. Think carefully and strategically about adjusting your asset allocation and keep a firm eye on the long-term, and stay informed so you can respond to both opportunities and risks in the right way.

Your age

If you’re five years away from retirement, you might have a different appetite for risk than someone who’s forty years off stopping work.

So if you’re a younger investor, you can probably afford to favour higher-risk, higher-reward assets such as stocks, whereas an older person might prefer safer alternatives.

Creating and managing a lucrative investment portfolio can seem a daunting task, particularly if you’re new to investing.

We’re here to guide you throughout the entire process, so please get in touch with our team of friendly, specialist financial planners.

We’ll be happy to answer any questions you have, so you can get started on this exciting and potentially lucrative journey.