Why all retirees need a property and financial affairs Lasting Power of Attorney

What would happen to your finances if you suddenly lost the ability to make decisions on your own?

It’s a tough question, but a necessary one that retirees must ask themselves.

In the UK, the average healthy life expectancy is just under 61 for both men and women, according to the BBC. This figure has dropped by two years over the past decade.

It’s therefore more vital than ever that you have non-negotiable protections in place, like a Lasting Power of Attorney (LPA), to safeguard your financial plan should you become ill unexpectedly.

This article will discuss how LPAs, specifically a property and financial affairs LPA, can protect your finances for you and your family.

A property and financial affairs LPA protects your financial plan should you become incapacitated

An LPA is a legal document in financial planning that gives a nominated individual the power to make decisions about your financial affairs should you lose mental capacity.

Reasons for this might include:

• Medical conditions like Alzheimer’s
• A brain injury resulting from an accident
• Complications from severe illnesses like a stroke.

Specifically, a property and financial affairs LPA allows you to appoint an attorney to make decisions about your finances while you’re unable to do so yourself. You cannot make one once you have already lost capacity – this must be sorted beforehand.

Unlike a health and welfare LPA, which safeguards your personal and healthcare needs, a property and financial affairs LPA grants the legal authority for someone else to make decisions about your:

• Bank accounts
• Investments
• Properties
• Insurance
• Other financial assets

You get to decide who your attorney, or attorneys, are. It’s also important that you regularly review your LPA, just like you would a will, to ensure that your chosen attorneys continue to best represent you and your needs.

Without an LPA, your finances are vulnerable – and your family may be, too

No one in your family has automatic rights to your wealth or to make decisions on your behalf – not even if they’re your next of kin. Only an LPA can legally grant this power.

With one in place, you can achieve peace of mind knowing that your finances are in safe hands.

If you become mentally incapacitated without an LPA, the only way your loved ones can receive the same powers is to apply to the Court of Protection to become your deputy.

The application process can be long, taking between 6 and 12 months on average. Your family will also need to pay £421 for the application, as well as additional costs like legal fees and private medical assessments.

During this time, your accounts will likely be frozen, leaving your finances in a state of uncertainty until your family acquires a deputyship order or until you recover. And because no one can legally make decisions about your finances, this could have a knock-on effect on your wealth and theirs.

For instance, if you needed care and your family couldn’t access your money, there is a chance they could end up funding this themselves until someone is granted deputyship by the Court of Protection.

Your Kellands financial planner can help you and your attorney manage your wealth, should the worst happen

Setting up an LPA today lowers the risk that your finances, and your family, will be at a disadvantage.

Fortunately, the process of registering an LPA is fairly simple, though you can consult a solicitor for guidance.

First, you must choose your attorney or attorneys. Do so carefully, as they must be individuals you trust to keep your best interests at heart while you are incapacitated.

This could be a:

• Spouse
• Partner
• Sibling
• Adult child or grandchild
• Long-term friend
• Trusted professional.

You can choose whether your attorneys must make all decisions jointly or if one can make decisions alone.

Next, you need to fill in the correct forms to appoint them as your attorney. You can do this online, using the GOV.UK portal, or on paper by downloading the form.

Then, you’ll need to send the completed forms to the Office of the Public Guardian, either via the portal or by post. Note that the application usually costs £92. A correctly filled application takes between 8 and 10 weeks to process.

Once your LPA is approved, should you lose mental capacity and control of your finances to your attorney, we can help make sure that your financial plan stays on course.

If your financial plan needs to be adjusted when you become ill – as it often does – we will work as a team with your attorney to ensure your best interests are protected.

Get in touch

If you’d like to learn how our award-winning team would support your chosen attorneys, reach out to your Kellands financial planner today for more information.

Email us at hale@kelland.co.uk or call 0161 929 8838.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

The Financial Conduct Authority does not regulate Lasting Powers of Attorney.

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