Cashflow modelling can help you share your wealth when your family needs it most

By David Lamb CFP™ MCSI

Do you know how much you want, need and will leave after your death, and how you are going to achieve this?

These questions are so important!

Many people when asked how much they want to leave will say nothing. One client told me that the last cheque he wanted to write would be to the undertaker and, if we did our job well, that cheque would bounce!

Most people will leave something because they don’t know when they are going to die (which is not too helpful for financial planning but probably good news).

But even those who want to leave nothing will end up leaving far too much because they fear spending too much and running out or, after a lifetime of savings, their brain is not wired to spend.

How much you need to leave changes throughout your life. Those with financially dependent families probably need to leave quite a lot to make up for lost income in the event of the early death of the breadwinner. Once the children are financially independent, so long as your partner is financially secure, you probably do not need to leave a lot.

How much you are going to leave is an essential question that needs to be answered to protect financial dependents.

Using cashflow modelling, these questions can be easily answered and can result in families being financially secure, no matter what happens, and spending money becomes easier because you know how much you can spend without running out of money.

Of course, many people don’t want that cheque to bounce and want their loved ones to benefit from their wealth once they no longer need it but you do not necessarily need to die before you no longer need it.

Your cashflow projections will indicate how much you can afford to give away without compromising your financial security. Why wait for your death before your family benefits?

If you are 30 when your child is born, and you live to the age of 100, they will not inherit until they are 70. They may have paid for their children to go through university and have helped them get on the housing ladder years before.

When they receive their inheritance, they probably do not need the money! If you are never going to spend the money, give it away when it is actually needed – and when you will be there to see the smile on their faces.

Hoarding your money without gifting or spending it is a waste of opportunities.

You can build your own cashflow model, for free, at