What is Wealth Planning?

wealth management

Many people work with no more than their income in mind. They use this to pay necessary outgoings, fund luxuries where they can, perhaps save a little with the future in mind. What very few people do is consider how this base income can be built upon and expanded outside of the realms of their job.

Wealth planning is the art of structuring, preserving and protecting your wealth to ensure that you get the most from your money.

Why Should You Consider Wealth Planning Services?

Wealth will always be under threat, with competing factions hoping to take a slice. Although their motives may be entirely altruistic, many people would like greater control over how their money is used, whether this is in terms of the taxes that they pay or the people that it goes to when they pass away. By failing to take steps to plan what happens to your wealth, your assets will increase less and are more likely to be eaten into by competing interests.

It is often the case that one generation is responsible for the creation of wealth. Research indicates that substantial gains are usually exhausted within just three generations if this is not properly managed. Over this period, capital tends to be eaten into not only by ordinary outgoings, but also by taxes including wealth, estate, inheritance and income tax. This makes structuring your wealth highly important for anyone who intends to preserve it beyond this point.

How Does Wealth Planning Work

Wealth planning works by taking into account competing strains on your resources and planning them in a way that maximises retention of your overall wealth. It tends to combine the disciplines of accumulation (or retirement planning) and distribution (estate planning).

The approach tends to be three-fold:

  1. Firstly, it focuses on creating, growing and preserving your wealth during your lifetime.
  2. Secondly, it considers how to support your lifestyle and objectives during your lifetime without exhausting your funds.
  3. Lastly, it considers how your wealth will be distributed upon your death, and the most efficient way of doing this without damaging your wealth.

It works by not only considering the most effective ways to maintain and protect your wealth, but also by balancing conflicting interests, such as the preservation of capital and the lifestyle you want to lead.  Thus, a ‘life plan’ will often be formulated to help you to see and understand the bigger picture, so that you can make the wisest decisions and learn how to control what happens to your money. Could wealth planning help you?