It’s never too soon…

You might know I’m an Affiliate member of the Society of Trusts and Estate Practitioners (STEP) and holder of their Certificate for Financial Services. In that role, I recently attended a webinar about Inheritance Tax, Long-term Care, Wills and Lasting Powers of Attorney, to update my knowledge on dealing with local authorities and funding care in a care home or care in a person’s own home.

That’s why we’re not talking about investments this month. Instead, we’re talking about the cheery subject of illness, old age and death. At least one of those is guaranteed to happen to all of us! Before things get to that point, there are certain sensible actions to take in order to protect yourself and your finances.

You probably know it’s wise to make a Will. There’s more on that below. But first, you should draw up a document that’s even more important, and that’s a Lasting Power of Attorney, commonly known as an LPA.

These documents are not just for old people!

Please don’t wait until you reach a certain age before you act on this advice. And, if you have grown-up children, please urge them to set up their own LPAs, sooner rather than later. That’s because anyone can have an accident, anytime, and need care. For example, read the Bateman story.

OK, so setting it all up takes a bit of time and money and admin – but the pain is a lot worse if you don’t do it. And we’ll make it easy for you.

There are two types of LPA, one deals with property and finance, the other covers health and welfare decisions.

Case study

Imagine that Annie and Bill are next-door neighbours who both have dementia.

  • Annie made a health and welfare LPA so her children can make decisions about medical matters on her behalf.
  • Bill didn’t set up a health and welfare LPA, which means it’s down to his social worker – not his family – to decide what’s best for him.
  • Annie also set up an LPA for finance and property. Her children can therefore access her property, pension and savings to pay the fees for long-term care.
  • Bill didn’t arrange a finance and property LPA before he lacked the mental capacity to do so. His bank accounts and investments were frozen so his family couldn’t access the money, nor could they sell the house to fund the care he needed. Instead, his daughter had to go through the expensive process of applying to the Court of Protection to be appointed George’s deputy. It took six long stressful months. Now, she has to submit annual reports to the Office of the Public Guardian, to prove she is looking after things responsibly. She finds dealing with the Court time-consuming and stressful, when she’s already stressed enough.

More information

LPAs are the only way you can keep control of your financial and healthcare decision-making. Before they can be used, the documents have to be registered with the Office of the Public Guardian and the process takes quite a while. Remember, this must be done before the donor loses capacity – so don’t delay!

Here’s Money Saving Expert, Martin Lewis, answering audience questions about LPAs in an 8-minute video on TikTok:

@martinlewismseDo you have a Power of Attorney? It’s crucial financial protection, probably more important than a will. Do watch my video briefing on why it’s so important, how to get one and more… Courtesy of ITV’s The Martin Lewis Money Show 14/03/22. Feel free to share.♬ original sound – Martin Lewis – Martin Lewis

By the way, if you have an old-style EPA (Enduring Power of Attorney), it’s still valid for financial matters but doesn’t cover health and welfare. It’s not true that the GP will help with this. What if you or a loved one need to go into a care home? What if family members disagree? Who makes that decision?

10 top tips about Wills

While we’re on the subject, here’s some useful advice to help you set up (or update) your Will:

  1. Use a professional to draft it (ask us and we’ll connect you to one of our recommended Will-writers
  2. If there’s even the slightest doubt about mental capability, get the Will witnessed or approved by a medical practitioner
  3. Add a letter of wishes to explain what you want
  4. Include a non-contest clause which means any beneficiary who contests the Will loses their inheritance (mwuhahahaha!)
  5. Update your Will regularly e.g. on marriage any previous Will is automatically revoked
  6. When you update your Will, leave something to all previous beneficiaries as they’re more likely to complain if you omit them completely
  7. Discuss your Will with all the beneficiaries so they don’t get any nasty surprises
  8. Revoke any previous Wills e.g. by writing “REVOKED” across every page – this takes away the risk of confusion
  9. Register the Will e.g. with the National Will Register – this means the latest version can easily be found
  10. Store it in a safe place e.g. Store Safe UK

Hopefully, these tips will help avoid family disputes when you’re gone – and that’s one of the greatest gifts you can give them.

Related reading

For more on this, please see our articles:

Lance Baron

Certified Financial Planner (CFP) based in East Sussex, UK. We support people in Southeast England with more than £500K to invest by building a financial plan that will help them live the life they want… until age 100