The major risk to all families, especially where there are young children, or a non-working spouse is the death or disability of the major earner.
What happens if the income tap is suddenly turned off – what are the consequences? Will property have to be sold? Lifestyle diminished?
For high earners used to a £500,000 pa lifestyle, around £15,000,000 in accessible capital is needed to continue funding that lifestyle for 30 years without reducing the capital.
If your wealth already covers that great. If it does not, you might want to consider temporary insurance or other changes to bridge the gap until it does.
For example, we helped a senior executive at a London auction house rearrange his affairs. He was concerned that his younger, non-working wife and young daughters were at risk if he could not work.
One year after the changes, which met his immediate need to protect his family without affecting their long-term prospects, he sadly died of cancer.
Thanks to the planning and structure put in place, his wife and children were able to stay in their home, maintain their lifestyle, afford the support they needed, and see that they were financially secure for the rest of their lives. The family wealth is protected from poor future decisions whilst remaining available to them as needed.
The peace of mind they have knowing this is beyond value. The emotional return on this money far outweighs any investment return for them.