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How to balance living with giving

  • Explain how to balance living with giving
  • Identify how advisers can help families mitigate potential poverty in later life
  • Describe why analysis and planning is important
CPD
Approx.30min

"For me, conversations about ethical investments have been a great way to raise philanthropic discussions. And the level of interest in sustainable investments has increased engagement and opened discussions up even further.”

Cleona Lira, IFA at Celtic Financial Planning, is trained in the practice of non-violent communication (NVC), which is a method of identifying the need behind every communication and interaction and aiming to respect that need.

She says: "It is important to hear all the needs at the table so that there is a plan that everyone can live with and work with quite happily.

"Needs in NVC refers to what is really important to everyone and to find a plan that is creative and can incorporate as many needs as possible."

Lira adds: "If conversations are difficult, it often helps to bring in a third party like a mediator or someone trained in conflict resolution, so that everyone can feel heard and understood.

"Sometimes it is hard to be objective and impartial, and it is courageous and admirable to ask for help if this is needed. Mediation brings in realism, where everyone’s needs are heard and considered and therefore balance is more achievable." 

Competing needs

Hanifan agrees it is important to be realistic in order to achieve the best balance between competing needs.

“It may look as if there is money for philanthropy, but the impact of care funding should never be ignored, as needing care may well dissipate many of the assets previously considered available for giving,” she says.

Emphasising the value of analysis and planning, she adds: “Analysis of the impact of care costs is important to ensure that the individual would have the funds for the quality of care they would wish, despite making a gift, and also to reassure concerned family members that lifestyle will not be impacted upon by a need for care should it arise. 

“Conversely, it may well be used to remove an obstacle placed in the path of a philanthropic older person by a family member looking for reasons for not gifting to others.”

Hanifan recommends that budgeting for care costs be done as early as possible, and not left until the need for care arises.

“A calculation showing how care costs have been factored in is essential. A good financial adviser can help with care-cost planning by ensuring that they always factor this into conversations about their clients' future wishes and lifestyle plans," she says.  

"An adviser can help to look at balancing the mix between capital growth and having savings that are accessible without penalties if needed.”

Morris encourages advisers to consider how best to also give consideration to family members who may potentially become full-time carers of their client.