As an investor you want to grow and protect your money. An important consideration for protecting your wealth is to decide what happens in the event of your death.

To ensure your investments can be passed along to your loved ones, choosing your beneficiaries should be one of the first things you do.

What is a beneficiary?

A beneficiary is the person who will receive benefits of your estate, property or wealth upon your death. Typically, these will be received as part of an inheritance, which is planned out in your Will. Your Pension is left to your beneficiary through your Expression of Wish.

An Expression of Wish is a statement to your Pension provider that lays out who will receive your Pension savings if you die before you have taken your money. Your Pension sits outside of your estate, your beneficiary won’t pay any inheritance tax on the money inherited through your Pension.

It is important to decide upon your beneficiaries, as this will ensure your assets are distributed as you wish. If you haven’t named beneficiaries, the government could dictate how your estate is divided and it may be less tax efficient to your wealth. You can better protect your financial legacy by deciding upon beneficiaries and sorting your Will today.

How do I decide my beneficiaries?

It is common to choose your spouse as your main beneficiary, but have you considered naming your children as secondary beneficiaries?

For some people, gifting your children financial stability can be a part of your legacy. You may not be thinking about your children’s inheritance right now, but by getting ahead and ensuring their names are included is essential if you want them to benefit from your investments when you’re no longer here.

Please be aware that as well as your spouse and children, you can name anyone you wish as a beneficiary, for example, other relatives, friends, charities or trusts.

What to do next?

Add a beneficiary to your Pension, contact your Pension provider and ensure this is set up in your Expression of Wish.

Establish your Will. Ensuring you have written a Will is important because if you do not have one, the law will decide what happens to your money, property, and possessions after your death.

Speak to a financial adviser

If you are unsure about anything, speak with a financial adviser. Your financial legacy is important, you want to make sure that it is protected appropriately.

You should then think about establishing your Will, and ensuring your wishes are legally recognised. 

The Financial Conduct Authority do not regulate, Will Writing, Tax Advice and Estate Planning. Tax rules can change at any time. This blog is not personal financial advice.

With investing, your capital is at risk. Investments can fluctuate in value and you may get back less than you invest. Past performance is not a guide to future performance. Tax rules can change at any time. This blog is not personal financial advice.

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