06 January 2023

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Start succession planning: three simple steps

Luigi Campopiano

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According to Janus Henderson Investors, approaching the topic of financial planning is less difficult than you think, provided you take small steps: a good way to start is to start with a simple check of your financial position.  Repeating the step intervals over a year can help you form a healthy financial habit, benefiting yourself and your loved ones.

Often, we fail to establish good habits. We set the goals too high — underestimating time and effort — and other times we don't even start because we think that the result may be too difficult to achieve. 

This is true when it comes to the desire to establish a generally good habit and one with the precise aim of improving our financial management. It is useful to transform a good resolution into something to be implemented only once a year instead of daily, weekly, or monthly. Even concerning one's assets, identifying a time to carry out an annual check-up of one's financial situation can be useful, especially concerning succession planning.

This problem is particularly topical in Italy. According to the results of research by the Finer institute presented at the 2019 Salone del Risparmio, only one out of five citizens has thought about succession planning. What’s more, only one out of 20 has acted, mainly due to the perceived complexity of procedures and for superstition reasons. 

Although estate planning is a complex subject both from a legal and an economic point of view, it is possible to start addressing the issue in three simple steps to be repeated once a year:

1. Create an archive of your most important financial documents, in physical and digital format, verifying annually that it is updated and in order concerning any life changes. Share these documents with your loved ones and entrust a copy to your wealth advisor, putting the physical documents in a safe and protecting the digital ones with the appropriate tools.
   
   
2. Indicate the beneficiaries of your movable and immovable assets. This step is extremely important because assets left without beneficiaries will have to undergo a procedure that can be lengthy and costly. The designation of beneficiaries must become a permanent habit because, at each important life event, it is important to reconsider the list of beneficiaries.
   
   
3. Prepare and update your estate plan. In the event of incapacity or death, the economic aspect is not only relevant, but also because close people will be called upon to make important decisions that could affect one's life. It’s wise to schedule a meeting with a lawyer specializing in inheritance law: that person will help prepare and verify a will, powers of attorney, and all the necessary documents annually.

With these three simple steps, it will be easier to approach the issue of succession, make an annual point of your economic situation, and know that you have given yourself and your loved ones more serenity.