7th November 2013 at 5:45pm
What’s the most taboo subject in your household?
I’ve spent my whole career dealing with the financial consequences of conversations which are linked to relationships and death, so what feels normal for me might not be normal for others.
In my family, we all know that my parents have wills in place. And we know what the wills say. We know that I can help to run my parents’ finances if they ever become unwell, because powers of attorney are in place so that I can support them with that. And as adults we’ve talked about this at the dinner table, usually with a slightly dark sense of humour coming out. We can relax about the legal and financial stuff – we’ve got peace of mind that all the right bits of paper are signed which future-proof how our own family financial tree works.
It turns out we’re in the minority – only 25% of people in our Family Financial Tree report say that planning family finances involves all generations.
People are shying away from having more open conversations about money.
Are we still being stereotypically British and buttoned-up about our finances?
And what’s the cost of that silence?
Look who’s talking
There were two groups shown in our research, who were better at initiating conversations. The first were parents with children under the age of 5, where 75% said they would seek the advice of other family members on money matters. The second were grandparents, where 45% said they had discussed inheritance with members of their family. It still leaves the majority of grandparents in our report not talking about inheritance, however.
Why might it be worth raising this topic?
It comes down to taking control over the smooth-running of your finances, and controlling who eventually inherits what you have.
The value of inheritances
The Office for National Statistics has recently published an analysis of inheritances between 2008 and 2010. It showed 1.6 million adults received an inheritance of £1,000 or more in that period. And one in ten people inherited £125,000 or more. Given that 61% of people who received an inheritance saved it, it’s clear that receiving an inheritance can have a fundamental impact on the future financial planning of the recipient. So, is it better to know in advance, or better to get a surprise? Have a look at the picture of the shape of inheritances here
An integrated plan?
It’s clear that money is flowing between different generations. If you view families as an inter-connected web which can provide mutual support (non-financial and financial) then why would you separate out future planning as an individual activity, rather than one which took into account the existence of that web?
What’s the elephant in your front room? What’s the conversation you’re not having? Try these 3 questions for starters :
1. Who do you have lined-up to look after your young children, if something happens to you – have you appointed a Guardian?
2. Have you got a properly signed and up-to-date Will?
3. Have you signed a power of attorney? Read our blog which tells the story of why this bit of paper is really important.
You can get help taking that next step by speaking to your lawyer. If you don’t have one, Standard Life has a referral service which can help you with wills and powers of attorney. We’ve linked with a law firm in England and Wales, and also Scotland, to make it easier for you to take the next step. These law firms offer a fixed fee service, to give you certainty over how much it will cost. If you’d like to use this service or request an Information Pack, call us on 0345 272 8848.
Please remember, we can’t guarantee the effectiveness of any arrangements entered into.