The fifth pillar of financial well being

If you are reading this and do not have a will, more information on intestacy can be found on the GOV.UK website.[3]

If that website makes for uncomfortable reading, I suggest prioritising getting a will completed as soon as possible.

One of my aunts was very specific about her legacy. Out of the blue, she was given just two weeks to live. Luckily, we were able to organise a legally binding will, but it took away time that she could have spent with family and friends. I say ‘luckily’ because being of sound mind is a key requirement when drafting a will [4], and many people who are suddenly given a short life expectancy may not be.

What is a lasting power of attorney?

A lasting power of attorney (LPA) is a legal document that lets you (the ‘donor’) appoint one or more people (known as ‘attorneys’) to help you make decisions or to make decisions on your behalf.[5]

There are two different types:

•  Health and welfare
•  Property and financial affairs

Both are equally important because they enable you to take control on who you trust to make those decisions.

If you lose mental capacity and these aren’t completed, then your loved ones might have to apply to the Court of Protection for permission to act on your behalf.[6] This can not only be time consuming, but also costly.

From a financial planning perspective, it could also be problematic. If all the finances are weighted in the sole name of the person who has lost capacity, the respective spouse or partner does not have a legal right to access the money. This can also come at a time when funds are needed quickly for ad hoc expenditure, or perhaps payment of bills, which will continue regardless of your situation. Hopefully, if you have partnered with a financial planner who is holistic in nature, they should have identified and planned to avoid such a scenario.

Lasting powers of attorney, once drafted, then need to be registered with the Office of the Public Guardian (OPG). Even if there are no mistakes or objection, it still takes up to 20 weeks to register.[7]

The health and welfare LPA enables your attorney to express your wishes when you are unable to in relation to your choices in areas such as life-sustaining medical treatment and general medical care. It only comes into effect once you have lost mental capacity.

My second aunt didn’t have LPAs in place. Thankfully, the NHS were brilliant and supported our requests in terms of end-of-life care; however, legally we did not have automatic authority.

Conclusion

Here at Saltus one of our values is ‘We Care’[8], which follows through into our approach when it comes to looking after your wealth and financial planning needs. Although these documents have no direct impact on growing your wealth, I would argue they play a vital role in providing peace of mind and should form part of any financial planning conversation.