The Atticus Papers

Bringing clarity to finance

Saturday 17th September, 2022

Lasting Power of Attorney – Things for an attorney to consider when investing a donor’s funds

Lasting Powers of Attorney naturally raise a number of difficult circumstances and considerations for the attorney responsible for the donor's finances. With the cost of care costs spiralling, managing money effectively for attorneys has become a nightmare. Attorneys are worried that a failure to invest at least some of the funds available will result in them running out of money to fund the donor’s care costs. However, the risk of potentially losing money by investing in asset backed investments is equally daunting. Some even question their authority to do so. I feel genuine sympathy for their plight. A vast number of attorneys are simply the concerned offspring, with no professional investment or legal background, looking to manage their parent’s assets in a way that will protect their mum or dad’s financial future. For many of them, the high care costs mean that they are watching the funds available become more and more depleted on a monthly basis. Unfortunately, there is no silver bullet in this situation. There are no cash deposits offering fantastically high rates of return with minimal levels of investment risk. The greatest security for many may come from purchasing an immediate needs annuity, but the prospect of paying a considerable sum for an income that may only last a matter of months, is an unpalatable option. This is a very complex area, and it is crucial for any attorney thinking about investing a donor’s money, to take financial advice. In this article, I have looked at case law to try and determine the circumstances in which it is suitable for the attorney to invest the donor’s money. Furthermore, I have highlighted some principles and considerations that may help attorneys to decide whether they should be looking to invest to maximise the donor’s returns.

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Monday 12th September, 2022

Pension death benefits – a guide to what happens to pensions upon death

What happens to my pension when I die? The demise of the final salary pension for the majority of people in the private sector, and the large drive to auto-enrol employees into employment related money purchase pensions, has resulted in a spike in the average value being built up by individuals in their pension pots. For many, the value of their pension built up over a lifetime, may now rival the value of their house. With so much value held in pension pots, many more people are now asking what happens to their pension when they die. I have therefore written an article which first looks at the changes which have occurred in the pension landscape with regards to retirement options and the treatment of pensions upon death, before looking at how the state pension, final salary pensions and money purchase pensions are each treated upon death under the relatively new pension freedoms. This is a complex area and if you have any questions, please don’t hesitate to give Atticus Financial Planning a call.

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Friday 2nd September, 2022

School fees planning - how to invest for and fund private school fees

I am frequently asked by clients what the best way is to save for private school fees. This is a complex area, due to the generally limited time to build up funds before the savings will need to be drawn down upon, as well as the relatively high level of fee inflation. There is also a lot of confusion about the current level of private school fees. In the article below, I have therefore taken the time to firstly review the current levels of school fees and the way they are paid. I will then look at the types of investments that should be used, as well as the most tax efficient investment wrappers to use. Lastly, I will also look at the options available to grandparents to help their family fund private school fees for the children.

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Friday 26th August, 2022

Should I keep funding my pension, if the contributions will exceed my pension annual allowance?

The importance of pensions as a tax efficient vehicle for funding retirement cannot be understated. However, more and more people are being caught by provisions brought in by the government that limit the amount individuals can save into their pensions each year. In the past, this may have been dismissed as a problem for the wealthy, that does not affect the average person in the street. While this may have been the case, when these restrictions were first brought in, new changes to how the annual allowance works, means that even people on modest incomes can end up triggering an annual allowance charge. More and more often I am approached by clients of all income levels who have inadvertently creates a tax liability by exceeding their adjusted annual allowance. In the article below I will briefly look at the annual allowance and how it works. I will also cover the main restrictions and their implications, before moving on to look at whether it is worth continuing to fund your pension, despite triggering the annual allowance charge.

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Monday 15th August, 2022

Relevant Life cover -How to tax efficiently provide your life insurance cover through your company

Many small business owners sink blood, sweat and tears into their business. All their dreams and future goals for themselves and their loved ones are often inextricably linked to the success of their business venture. Often they are the main bread-winner, with their partner staying home and looking after the family. When they succeed, it is the culmination of years of effort and stress, but the rewards are so sweet. However, what happens if the unforeseen happens? What happens to your family and all the resources and effort that have been sunk into the business if the adventurous business owner dies? Do all their dreams and ambitions for their loved ones die with them? In this article, I will discuss how to protect against such an event, using your business to provide the protection your family needs. Furthermore, I will show how this can be in a manner that can be far more cost effective and tax efficient than if you were to pay for the life insurance your self.

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