Wills and Lasting Power of Attorney
These are two very different, but very important, documents when it comes to protecting your money in the future. The future might seem a long way off to you right now, but thinking about get these in place as soon as you can is a good idea.
Where there’s a Will
You’re probably familiar with what a Will is, so we won’t spend time going into detail about what they are. What we will say is that having a Will gives you control over the estate you leave behind. It allows you to make sure your spouse or partner, and any children, are looked after financially.
If you don’t make a Will, the government will decide what happens to any assets, property and money you own when you die. This could mean partners and children missing out. Having your wishes clearly laid out in a Will means they’re legally entitled to whatever you want to give them.
What is a Lasting Power of Attorney?
Like a Will, a Lasting Power of Attorney (LPA) is a legal document. Its purpose is different, however, as it gives another person (of your choosing) authority to act on your behalf if you’re not able to make decisions yourself, because of illness, accident or even old age.
It’s worth noting here that they only cover England and Wales. Scotland and Northern Ireland have their own similar systems called respectively, Continuing Power of Attorney and Enduring Power of Attorney. We’ll just use the English and Welsh term here, but the principles discussed are broadly the same.
There are actually two types of LPA: A Health and Wellness LPA and a Property and Financial Affairs LPA. The first one covers things like your long-term medical care if you had a stroke, for example, and can specify what you want to do if this happens.
With a Property and Financial Affairs LPA, you can name a family member, close friend or professional, you’d like to look after your money and property if you can’t manage these decisions yourself.
What happens if I don’t have an LPA?
Quite simply, it means no-one (not even your next of kin) will be able to do anything with your finances. Not even simple things like accessing your bank account, so they can buy food and other essentials for you. And if anyone needs to talk about utility bills or your mortgage, the service providers won’t be able to discuss anything with them, which can cause lots of stress and issues.
It also means people will have to make a decision about what healthcare options for you if you become seriously ill. Specifying someone who understands your situation and what your needs and wants are if this was to happen, can take the guesswork out of it and make things easier to deal with.
Start planning now
You can only put an LPA in place while you’re capable of understanding what it means. So, by the time you might need one, it’ll be too late to get one if you haven’t already.
Taking action now can stop this happening and give you peace of mind knowing it’s taken care of. We’d suggest talking to a solicitor to get things started. You can set LPAs online yourself if you want to keep things simple and keep costs down, but speaking to a professional might be worthwhile if your finances are complicated.
Will Writing and Lasting Power of Attorney is not part of the Quilter Financial Planning offering and is offered in our own right. Quilter Financial Planning accept no responsibility for these aspects of our business.