Few people think about their own mortality, most want to make arrangements that upon their death to leave their affairs in order, to have their assets, their possessions distributed according to their wishes to their loved ones and to put in place a Will to give these decisions legal meaning.
But Family Planning is more than having a Will. It involves people, children, family structures and beneficiaries. It involves trusts, taxation, and potentially, business succession.
If something unfortunate occurs to any family member, the aim of a Risk Management Plan is to ensure all contingencies are covered and that the surviving family members are looked after financially.
The plan looks at all situations. It looks at the family assets, the liabilities, what assets will be retained, what assets sold and what will be the remaining debt that will need to be removed with a life insurance policy.
How much income will the surviving family need to live on? Where will this come from and will there be added expenses such as childcare, housekeeping and education fees to be considered?
The plan considers all of these factors and offers some solutions to protect the family's personal and/or business interests (or both) and to ensure the plan is tax effective.
Planning must not only consider the ramifications upon Death but also upon Disablement because a family member who is disabled may have the same far-reaching financial implications on the family as a death.
What a plan does is to provide information of these areas of exposure to risks that will allow the family to make informed decisions. Ultimately, it is up to members of the family to decide on how much insurance cover they need.
The aim of an AFRM adviser is to assist in analysing all of the above facts and providing solutions to meet the family's needs.