How to protect your wealth: A five-step plan

After dedicating years - maybe even decades - to building your financial foundation, it's only natural to want to safeguard what you've earned. Whether it's for your peace of mind, your family's future, or to leave a legacy that lasts, protecting your wealth is just as important as creating it.

Too often, life’s unexpected turns - be it legal disputes, taxation, or poor planning - can put your hard-earned assets at risk. That’s why having a clear, proactive plan is key. The good news? It doesn’t have to be complicated.

Here’s a straightforward five-step strategy to help ensure your wealth is protected - not only from unforeseen circumstances but also from those who might not have your best interests at heart. This approach will help preserve what you’ve built, so your children and loved ones can benefit from it in the years to come.

Step one: Don’t burn through your own assets too soon

One of the biggest mistakes people make is pulling money out of their investments at the wrong time - especially during a market downturn. It might seem like the only option when unexpected expenses hit, but cashing out while prices are low can seriously damage your long-term financial growth. Even if markets bounce back later (as they often do), your portfolio won’t recover as strongly if you've already sold off a chunk of it.

Instead, think ahead. Build a robust emergency fund - ideally enough to cover several months, perhaps even a year, of essential living expenses. Having easy-access cash means you won’t be forced to sell investments at a loss when life throws you a curveball.

It’s also worth facing a few hard truths: none of us can guarantee perfect job security, and illness doesn’t always happen to “other people.” That’s where smart protection steps in. Income Protection or Critical Illness Cover can be a financial lifesaver if your earnings suddenly stop. Not only does this give you breathing room, but it helps preserve your long-term investments - so your future wealth stays intact, no matter what life brings your way. MoneyHelper provides free, impartial advice and has created an informative guide on financial protection. Click here to learn more.

Step two: Keep creditors at arm’s length

It’s a hard truth, but your wealth isn’t just vulnerable to market shifts - it can also be exposed to claims from creditors, business partners, or even personal disputes. That’s why it’s crucial to think strategically about how your assets are structured.

If you own buy-to-let properties or run a business, ask yourself: should these sit within your personal portfolio? In many cases, placing them into a separate legal structure - like a limited company or LLP - can act as a financial firewall. That way, if something goes wrong in one area, your personal assets won’t automatically be dragged into the fallout.

But what if a company structure isn’t right for you? Then the next best thing is clarity. If you’re in business with others, make sure you’ve formalised the relationship. Have your partnership agreements drawn up properly, with clear definitions around roles, responsibilities and, most importantly, liability. Don’t rely on a handshake and goodwill.

And while we’re on the topic of personal relationships, it may be worth reviewing how your financial affairs are set up with a life partner. Whether you’re married or not, putting the right agreements in place now can prevent complications later. Because when it comes to protecting your wealth, assumptions are never a substitute for preparation. We've put together a blog post on why protecting your wealth isn’t just smart - it’s essential. Click here to discover why it should be a top priority for you and your family.

Step three: Don’t let tax eat away your wealth

It might seem obvious, but it’s worth repeating that taxes are one of the biggest silent threats to your wealth. Left unchecked, they can quietly erode everything you’ve worked so hard to build.

The good news? There are plenty of smart, legal ways to keep your tax bill in check - but surprisingly few people make the most of them. If you haven’t already, explore strategies like salary sacrifice schemes, boosting pension contributions, or investing through Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCTs). These aren’t just for the ultra-wealthy - they can significantly reduce your income tax bill while aligning with your long-term goals.

And when it comes to inheritance tax, timing is everything. Many people wait until later in life to start planning, but the earlier you act, the more options you have. Gifting to loved ones or donating to charity can reduce the tax burden on your estate - but don’t forget the seven-year rule. Gifts made within seven years of your death may still be taxed, and the exemptions taper quickly, potentially leaving your children with a hefty and unexpected tax bill.

The bottom line? Tax planning isn’t about dodging responsibilities - it’s about being smart, forward-thinking, and ensuring your wealth ends up in the hands of the people and causes you care about most. Tax planning is crucial. To ensure you're fully prepared, we've created a comprehensive tax planning checklist. Click here to learn more...

If you’d like to pass on your wealth but still retain some benefit from it, it may be worth exploring whether a trust could offer protection from Inheritance Tax (IHT). Trusts can be a powerful estate planning tool, allowing you to keep a degree of control while potentially reducing your tax liability.

That said, this is a highly complex area and not one to rush into. Gifts and trusts are often irrevocable, meaning once the decision is made, there’s usually no going back. So, it’s essential to think through the implications carefully and seek expert advice to ensure everything is set up in a way that truly aligns with your goals.

Step four: Make sure your wealth lands in the right hands

You’ve worked hard to build your estate - so it only makes sense to decide exactly who should benefit from it. But without a valid will in place, that decision might not be yours to make.

When someone passes away without a will, strict legal rules – known as Intestacy - determine how their estate is divided, and those rules don’t always reflect personal wishes. For example, if there are no children or grandchildren, your spouse or civil partner may only be entitled to the first £250,000. Anything above that could end up going elsewhere - and in some cases, to the government. To understand the rules of intestacy, click here to read our comprehensive blog that covers everything you need to know.

If you want to be certain that your wealth reaches the people you love, writing a will is essential. It’s one of the simplest, most effective steps you can take to protect your legacy.

But don’t stop there. Make sure you review the nominated beneficiaries on your pension plans and life insurance policies too. These often sit outside your will, and outdated nominations could result in funds going to the wrong person or being delayed by unnecessary complications.

A little preparation now can save your family a great deal of stress later. It’s not just about protecting wealth; it’s also about protecting your wishes. Having a will is essential. Discover the top three reasons why you should have one. Click here to read on…

Step five: Protect your children’s inheritance from unwanted claims

Passing on wealth to your children is about more than just generosity - it’s about legacy. But what happens if one of your children goes through a difficult breakup or divorce after inheriting from you?

In many cases, an estranged spouse or partner (whether married or not) could make a claim on that inheritance. And if the courts get involved, there’s no guarantee that your wishes will be honoured. Part of the wealth you spent a lifetime building could end up outside your bloodline, leaving less for your grandchildren and future generations.

The good news? There are ways to plan ahead and protect against this. One powerful option is setting up a trust. By placing assets into a trust, you can create a protective structure that keeps wealth within the family and out of reach of third parties.

Even better, if you set up a living trust, this protection starts while you’re still alive, offering an additional layer of control and peace of mind. It’s not just about shielding money; it’s about safeguarding your family’s future from the unexpected.

Protecting your wealth: A smarter way forward

You’ve worked hard to build your wealth - now it’s time to make sure it’s protected. Life can be unpredictable, and without the right planning, even the best-laid financial foundations can be shaken. From unexpected expenses and relationship changes to tax implications and legal claims, there are real risks to your legacy.

By preparing with an emergency fund, keeping your personal and business assets sensibly structured, and using tools like pensions, trusts, and wills, you can take control of your financial future. Effective tax planning and careful estate structuring will help ensure your wealth ends up exactly where you want it - with your loved ones, not the tax office or the courts.

At Reeves Independent, we specialise in helping individuals and families protect what they’ve built. Whether it’s through strategic financial planning, estate protection, or retirement solutions, we’re here to guide you with clarity and confidence.

Book your free, no-obligation review today, and take the first step toward securing a brighter future - for you and your family.

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