Preparing for difficult but important moments
There are many unknowns in the later stages of life and preparing a plan to deal with whatever circumstances arise can be a daunting prospect.
These can be difficult but very important moments. When life is thrown into turmoil it can be challenging to focus, and it’s often a time when you need to be practical. Preparing in advance can mean that you’re in a good place to be able to deal with things as and when they arise.
Most people’s affairs are intrinsically linked with every financial aspect of their life, be it their home, investments, savings, material things and in fact everything they own. A financial adviser can be extremely valuable in helping you prepare for what lies ahead by taking stock of what you have and making sure all your affairs are in order, should you have to deal with a difficult moment, or indeed should anyone close to you have to on your behalf.
How can your Adviser help you?
There are many ways and one important thing is to set up a Lasting Power of Attorney, and this week we take a look at how you can do this and what you need to consider.
In addition, you can get all your paperwork and documentation together with all the details of what you own, where it's held and where you can go to get the confidential documents you or anyone else might need. We share with you a short checklist of all the things that might be on that list. You can build a document portfolio which houses all this information in one place. All you need to do is talk to your financial adviser who will assist you in doing that.
Lasting Power of Attorney - what, when and why
It may not be the easiest conversation to have but talking about what should happen if one of your nearest and dearest becomes incapable of looking after their own affairs can save a lot of pain in later life.
That’s why courts grant a Lasting Power of Attorney (LPA), to ensure that managing finances doesn’t create an additional burden. A LPA gives another individual the legal authority to look after specific aspects of your affairs should you lose the capacity to do so. They are an important part of later life planning and should be taken into consideration when speaking to your financial adviser.
Different LPAs for different purposes
1. Covering health and welfare matters.
2. Property and financial affairs.
When appointing someone to have a LPA, you can choose to make that person (or more than one person) have the power and responsibility in one or both areas.
LPA responsibility for health and welfare matters usually relates to decisions about medical care, support at home, moving into a care home or the refusal of life-sustaining treatment.
In relation to financial matters, the LPA responsibility can cover aspects such as paying bills, collecting benefits, running a bank account, investing money or selling your home. A key difference is that a property and financial affairs LPA can be used while the person still has capacity, whereas a personal welfare LPA can only be used once they have lost capability.
LPAs are legal documents that can be set up relatively easily, with or without the help of a solicitor. Without the help of a solicitor, registration can take up to three months and cost £82 per LPA. You could also consider having one alongside your will.
Choosing your attorney
You may choose anyone you trust as your attorney, such as a family member or close friend, provided that they are over 18, not bankrupt and they are willing to take on the role. A LPA conveys a serious legal responsibility; it is the duty of the holder(s) to make all decisions in your best interests.
They must follow certain principles set out in the Mental Capacity Act aimed at making sure you are encouraged to make your own decisions where possible. As the donor, you can restrict or specify the types of decisions the attorney can make, or you can allow them to make all decisions on your behalf.
To protect your interests, a LPA must be signed by a certificate provider – a solicitor or someone else of your choosing – who certifies that you understand the LPA and have not been pressurised into signing it. You could choose close friends or relatives (other than your chosen attorneys) who must be formally told that you are setting up a LPA and given the opportunity to raise any concerns.
If you decide to use a solicitor in setting up a LPA, it’s likely there will be additional charges for their services and the costs vary.
Would those closest to you know where to find your key documents if they needed to?
For most people sorting out their financial paperwork is a job they often put off, but illness and accidents can happen at any time so it’s important to get all your important documents into one place together, for when you or someone close to you may need them. Tracking down important paperwork and making sense of it can be extremely challenging for those dealing with your affairs if there comes a time when you’re not able to do it yourself. Indeed increasingly, it may not be paperwork that you need to find; often important documents are held and stored digitally. This can result in unnecessary stress and can also have far more serious consequences if your assets go undetected.
A simple checklist
It’s a good idea to get all your documents together in one place and keep a record of what’s there to help you and your family.
As a start point, we have created a list for you to check that you have all the important information and then you can start to gather the relevant documents. You can talk to your financial adviser about what level of detail you need to gather and how and where you could store this information in one place safely, so that you or anyone helping you can get their hands on it when you need to.
It won’t take long to do but would make all the difference to you if you forget, or for others who may have to handle your affairs. It can also give you a snapshot of your current financial position and would be a useful aid when having a conversation with your financial adviser too.
Are you looking for some help?
If you would like to find out more about any of the areas outlined above or are interested in receiving some advice please contact your financial adviser, and they will be able to prepare you for what lies ahead and get all your affairs in order.
We are open for business as usual, our Financial Advisers are available on the phone so please contact us if you have any questions.