Dispelling 4 Myths About Estate Planning

Some individuals wrongfully think they do not have significant assets that they can pass on to the future generations and undermine the importance of managing family wealth in india. This faulty approach apart from resulting in disputes between the person’s dependants can also lead to taxation issues. One of the most important aspects of private wealth management is estate planning. Whether you live in a modest one-bhk apartment or own multiple properties in posh locations around the country, designing and implementing an estate management plan must top your list of to-do-things. Estate planning in India is still not very popular, primarily due to the many misconceptions associated with it. To help spread awareness on the topic, the post lists some myths about estate planning and corresponding facts to penetrate the shroud of mystery engulfing it. Take a look.

1. “I’m too Young for Estate Planning”

Many people start thinking seriously about estate planning only when they reach a certain age or amass a certain amount of money in their bank account. Age, however, has very little correlation with estate planning. One thing is for sure; life is uncertain, which is why you must start estate planning at an early age and even with a lesser income.

2. “I Need Legal Help to Draft Documents” 
  

Though there is no denying the fact that drafting complex legal papers will require legal help, it is perfectly okay to adopt the DIY approach (especially if your family and financial situation is simple) to draft a simple will and power of attorney. Several sites offer templates to draft these documents. If you have a health condition, contact your hospital to get a health care directive.

3. “An Estate Plan Just Concerns Property and Belongings”

Many people wrongly believe that the scope of an estate plan is limited to managing their property and belongings. A detailed estate plan apart from covering these aspects also deals with personal matters, such as deciding the guardian of the kids in case the person dies or becomes incapacitated and is no longer in a position to care for their child. The person in their will can also mention their preferences about the type of medical treatment they intend to receive if they are unable to express their wish themselves.

4. “Estate Planning is a one time Process”

Many people wrongfully consider estate planning as a one time process and discount the importance of revisiting their estate planning strategy. Estate planning, however, is an ongoing process and changes in the person’s situation such as a death in the family, a change in their marital status (marriage or separation), birth of a child, an inheritance, or sale of business can impact their estate planning, which necessitates the need to revisiting the strategy.

Conclusion 

Estate planning helps you and your dependents get ready to face unforeseen situations. When embarking on a journey with your wealth manager to designing your customized estate management plan, stay clear of these myths to take informed, unbiased and prudent wealth management decisions.

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Guide to Sector Investing: Enhance Your Financial Portfolio

Sector investing is considered one of the successful ways to enhance financial portfolio, while mitigating investment risks. Sectors are comprised of various companies with common business verticals, such as natural resources, technology, and financial services. The reason why sector investing could be the right approach to secure private wealth is the constantly changing nature of business sectors. If a particular sector is not performing well in the market, you can always move on to another sector, and then buy back your investment once you have made a substantial profit. To give you an overview on how sector investing works, here is a guide on the ways to enhance your portfolio with sector investing.

Sector Investing Strategies
Sector investment strategies depend majorly on your personal and financial objectives. Here are three ways you can implement sector investing.

Enhancing Portfolio
Portfolio enhancement is associated with utilizing a part of your investment to invest in a particular sector. This strategy either diversifies your investment projects or lets you venture into a new one.

Managing RisksRisk management is another approach towards sector investing, which focuses on reducing the overall investment risk to your investment portfolio. The reason why investors go down this path of investment is supported by the fact that the correlation between different industry sectors can be lower than those between general categories.

Completing the Portfolio
Portfolio completion targets those sectors that are missing on your portfolio. This strategy poses a challenge to identify promising opportunities in a sector that is not listed on your investment portfolio. A due diligence on your part and help from a wealth management firm can help you overcome such challenges.

Benefits of Sector Investing

Here are a few benefits of sector investing:

    Successful portfolio diversification

    Mitigating investment risks

    Exposure to significant expertise across the global credit markets

Challenges Ahead

    Lack of industry knowledge and developments

    Inability to identify promising investment opportunities

Need Help Investing?
If you are looking to invest your private wealth in multiple sectors, seeking the services of a reliable private wealth management firm will go a long way. A wealth management firm will help you make calculated decisions regarding your sector investment decisions. Though sector investing holds strong promises for a successful investment, you can try conventional options, and the firm can help you with any kind of investment you wish to make. If you need other financial services including private banking services anywhere near Gurgaon, Mumbai, and Bangalore, you will find reputed wealth management firms such as Client Associates.

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A Sneak Peek into 5 Smart Tax Saving Instruments

Choosing a tax saving instrument that’s optimal for you can be a little perplexing. The reason is you need to analyze everything from the returns, flexibility, liquidity to the cost of the investment. Simultaneously, you need to ensure that the investment meets your financial goals. To help, we decided to list five smart ways you can save more tax. If you are don’t have the time for tax planning or find it confusing, you can seek the assistance of a professional firm offering taxation Services India.

1. (Equity Linked Savings Scheme) ELSS Funds

ELSS funds are one of the most transparent and highly liquid tax saving instruments with a 17.8 percent average return record in the past three years. Although these equity schemes present a market risk equal to other diversified funds, they offer better returns than 3- to 5-year PPF investments.

2. (Unit Linked Insurance Plan) ULIP

Unit Linked Insurance Plan or ULIPs come in the form of stocks, bonds, and mutual funds. The tax instrument offers certain risk cover to the policyholder and greater flexibility over direct mutual funds. Another advantage is that you can use these investments before three years, and either as equity or debt, and vice-e-versa. ULIP investments cost less than direct mutual funds and are suitable for people across all life stages and all types of investors.

3. National Pension System (NPS)

The NPS or National Pension System now offers an additional of Rs 50,000 of tax deductions, which makes it an attractive tax saving investment for many people. NPS entails two types of accounts: Tier I and Tier II. Tier is like a pension product, whereas Tier II operates like a savings account, which means you can withdraw money from it when you want. Once you choose a pension plan, however, you cannot switch to another before a year.

4. Senior Citizens’ Saving Scheme (SCSS)

The Senior Citizens’ Scheme is an ideal tax saving instrument for senior citizens. Although it has an overall investment limit of Rs. 15 lakh, it offers one of the best interest rates, at 9.3 percent, in the list of post office schemes. The maturity period is 5 years, which you can extend by 3 years.

5. BANK FDS AND NSCs

If you are a senior citizen who has already used the 15-lakh investment limit in the Senior Citizens’ Saving Scheme, you can further use the option of FDs (Fixed Deposits) or National Savings Certificate. NSCs offer a rate of interest in the range of 8.5% - 8.8%. The interest rates of fixed deposits depend on the lock-in-period. If you don’t have the time for assessing other tax investment schemes, and the deadline is near, invest in FDs and NSCs.

There’s More!

There are various other investments such as PPF, VPF, and pension plans, which you can use to gain good returns and save a significant amount of tax. Speaking to a professional taxation service provider in India can help learn more about your options. In addition, such providers often offer other services such as wealth management, which you can use to multiply your wealth and protect your investments. 

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Avoid These 4 Pitfalls When Managing Wealth

Wealth management should top your list of to-do-things, whether you have millions stacked in your bank account or modest savings and resources. Following a private wealth management strategy, apart from helping you manage your finances, is also one of the effective ways to ensure a hassle-free retirement life. Wealth management industry in India offers a range of solutions for entrepreneurs, salaried individuals, and those with family wealth, to help them plan their finances and secure a secure future. You can, therefore, avail the services of a wealth management professional to chart an investment strategy. While designing the plan, make sure to avoid the pitfalls discussed below to get the most out of your investments. 

1. Cash flow mismanagement 
The most significant aspect of managing your cash flow is maintaining a correct mix of inflows and outflows. It is also advisable that you invest a certain percentage of your income every month to ensure you have significant funds stacked as savings by the time you retire. Invest in tax saving instruments such as ELSS mutual funds, PPF, NSC, and National Pension Scheme. Additionally, consult your wealth manager to devise ways to carry forward and offset losses that you may have incurred during the financial year.

2. Mismanaging debt 
Too much debt reflecting in your balance sheet is a disaster waiting to happen and can topple your financial planning strategy. To address this issue, you need to manage short-term debt such as credit card outstandings, student and personal loans, keeping it at a level lower than liquid assets you own. If you have too many short term loans pending, consider raising a debt consolidation loan with a low interest rate to pay off all the outstandings. 

3. Failing to manage windfall gains
Windfall gain refers to any unexpected income due to unplanned property inheritance, unexpected gains from the sale of property or shares, or a lottery win. They say make hay while the sun shines, similarly, using additional funds prudently can pave a path to financial freedom. To make optimal use of the funds available to you, first and foremost clear all outstanding debts. Next, consider investing in tax saving instruments and acquire additional assets. Set aside some funds for your emergency corpus and revisit your estate management strategy to change it according to your financial condition.

4. Not having an estate management plan
Many individuals consider estate management a futile exercise and an activity for the elite. The belief is as far from fact as imaginable. A dedicated estate management strategy is for everyone who owns any property (including a vehicle, a house or stock option). Many others who follow a dedicated strategy commit blunders such as forgetting to fund the trusts or changing beneficiary designations in their life insurance plan and failing to draft a power of attorney for health care and property. Avoiding these pitfalls is imperative to planning a successful succession strategy.

Conclusion
A carefully planned and executed private wealth management strategy is your doorway to financial freedom. Make sure you hire the services of an experienced wealth manager that can help you take steps according to fluctuating marketing conditions and business cycles. When you’re successful in finding one, communicate your financial goals and objectives to help them design a strategy unique to your needs.

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