How to make your financial dependents safer?

If you’ve made it this far, it’s probably because the financial security of your dependents is an important issue for you. And no less. Undoubtedly, providing a peaceful and quality future for the people we love must be at the top of our priority list.

But, do you know why family financial protection is important and what you need to do to conquer it? That’s exactly what we’re going to talk about in today’s article. Here, we’ll explain the relationship between your family’s financial security and estate planning, and how this concept can help you ensure peace of mind for your dependents .

Check it out below!

Do you know what family financial protection is?

Unlike what many people think, family financial protection is not exactly offering a good quality of life for your dependents. The concept is actually related to what we do to protect our families in case of financial emergencies .

If you lose your job today, what about your family’s financial situation? If, unfortunately, a family member faces a complicated health situation and this involves a high financial cost, how prepared is your family for this? The answers to these questions say a lot about family financial protection .

The concept concerns, therefore, a financial reserve intended for emergencies such as those reported above, which can be used in case of lack of income or absence of the family provider.

Why is family financial protection important?

With the concept presented, it is already clear how much family financial protection is an essential aspect that you need to take into account, right? Recently, we have been able to see in practice how families can be affected by financial emergencies.

The Covid-19 pandemic has changed many people’s lives, as you well know. And from an economic point of view , the impacts were enormous. For almost two years, for example, everyone was forced to face social isolation and, therefore, people stopped traveling.

Imagine the situation of a family whose main source of income was a tourism agency, which was a family business? Right away, you can imagine that the financial situation got complicated and, without a doubt, you can say that it could have become unsustainable if they didn’t have any family financial protection plan .

How to conquer family financial protection with investments?

You probably already understood that the way to conquer family financial protection is to make an emergency reserve , right? What, perhaps, may not yet be clear to you is that the safest way to build this reserve is to make low-risk, high-liquidity investments .

That’s because, in case of financial emergencies, this money needs to be easily accessed . Which, obviously, does not mean that the best way is to leave it in your bank account, see? The best alternative is, without a doubt, to opt for investments that guarantee an interesting return, even if you can withdraw the amount at any time.

And there is another feature that also needs to be observed and that ends up being ignored by many people in situations like this. If the financial emergency is a consequence of the absence of the family provider, for example, how can his dependents have access to this emergency reserve? This is where estate planning comes in , which we also need to talk about.

What is the relationship between family financial planning and estate planning?

Family financial planning and succession planning are two concepts that need to go hand in hand. That’s because the financial reserve built to protect the family from emergencies and unforeseen needs to be accessible when these moments happen.

Imagine that, in the example of the travel agency we gave above, in addition to the company having had huge financial losses, the person responsible for the family’s financial administration had died. If this family had not thought about succession planning, even with family financial planning, all the preparation for times like this would have gone down the drain, because, probably, no one in the family would have been able to access the emergency reserve .

Succession planning, therefore, is a strategy that creates mechanisms to guarantee the maintenance of a family’s income in the event of the absence of its main provider . And, as you might have understood, it needs to go hand in hand with family financial planning.

How can private pension increase the financial security of your dependents?

And if you’re wondering what the best way to unite family financial planning, succession planning and the best investment to build a financial reserve, we have the answer: private pension .

In addition to being a type of investment with several tax benefits (such as the absence of quota eaters and the possibility of deducting up to 12% in Income Tax for PGBL), private pension plans offer facilities when it comes to property succession. This is because it is the beneficiary who decides, at the time of contracting the plan, who will receive the accumulated balance in the event of his/her absence. And the choice is free — the persons nominated do not need to be direct heirs or dependents.

And another advantage is that, unlike other types of investment, private pension does not need to go through an estate or inventory process . In case of absence of the plan holder, the balance is transferred, simply and without bureaucracy, to the indicated beneficiaries.