The approach to retirement is a time to make decisions about pension pots, retirement income and aspirations for holidays. It is also an ideal time to do other planning which will ease concerns you may have for the future and make life easier for your friends and family in certain circumstances.
1. Appoint a relative or friend as your attorney
Some 40-50% of us will suffer a period of incapacity in our lives. But only around 10% of us have a Power of Attorney in place, appointing someone to manage our finances and welfare if we suffer incapacity or need some extra help. If we are in the other 90%, and lose the ability to look after our own affairs, our family or friends may face considerable problems in looking after us.
If you lose the ability to put a Power of Attorney in place, the alternative involves an application to the Court, is expensive, slow and could lead to family disputes about who becomes guardian. Making a Power of Attorney will always be cheaper and quicker and allows you to retain control of your own affairs.
2. Make a Will
Writing a Will is not as exciting as planning your first post-retirement holiday, but you’re better to be in the 40% who make a Will than the 60% who don’t.
By having a Will you keep control of who inherits your estate and can protect young and vulnerable beneficiaries; if you die without a Will, the law will decide for you. The process for administering your estate will be more difficult for your executors, be more expensive and will take longer.
3. Make an advance directive (also called a living will)
In Scotland adults with capacity can influence or refuse medical treatment. If you lose consciousness, you cannot make these choices.
An advance directive allows you to state your preferences for treatment or non-treatment in certain circumstances. This means that doctors, carers and family know your preferences and helps remove difficult decisions for family members or medical staff.
4. Review your Inheritance Tax (IHT) position
More and more of us have estates which could be subject to an IHT liability on our deaths. There are various planning methods which can be used to mitigate a potential IHT liability and these are most effective if implemented at an early stage. A pre-retirement IHT review, taking into account your own personal and financial circumstances, can help protect your family’s wealth going forward.
We appreciate these steps are not the most exciting pre-retirement tasks. However, they are simple to undertake and will bring great benefits to you and your family and friends once completed. Perhaps when they are done, you can reward yourself by booking your first post-retirement holiday.
