SNAPSHOT2 min read

3 powerful reasons why you need a Lasting Power of Attorney to protect your wealth

Four in five people over the age of 55 don’t have a Lasting Power of Attorney (LPA) in place. Learn what an LPA is and how it can help you protect your wealth in the future.

04/05/2023
GettyImages-1177096889_1

Life is unpredictable and being prepared for unexpected hurdles is one of the main benefits of a strong financial plan. If, for some reason, you are unable to manage your own affairs, you want somebody you can trust to do it for you.

A Lasting Power of Attorney (LPA) allows you to appoint the right person to make decisions on your behalf, so you can ensure that you and your family are looked after.

Despite the importance of this step, a study from Lloyds Group has found that four in five people over the age of 55 don’t have an LPA in place, while nearly two-thirds of people are unaware how it can help them.

The good news is that setting an LPA up is relatively easy and this one simple change can give you and your family more security in the future.

Read on to learn what an LPA is and three powerful reasons you may want to consider putting one in place.

An LPA gives you control over who takes care of your affairs

We don’t like to think about worst-case scenarios, but if you fall ill and you are unable to make decisions for yourself, you might want somebody you trust to act on your behalf.

An LPA is a legal document that allows you to choose an “attorney” to make decisions for you. It sets out who the attorney (or attorneys) will be, as well as the specific powers they have.

There are two different types of LPA:

  • Financial LPA – this gives your chosen attorney permission to pay household bills, access savings and investments, and deal with other financial products like pensions or insurance policies. They have control over these decisions if you are not mentally capable. But, if you choose, you can request that they make decisions on your behalf while you are still of sound mind.
  • Health and care LPA – this gives your chosen attorney permission to make decisions about medical treatment and other forms of care your receive. For example, they may decide if you need a carer to visit you at home or whether you should move into a care facility. They may also make decisions about what you eat or who you have contact with. Unlike a financial LPA, you cannot request that somebody else makes these decisions if you are still mentally capable. It only comes into effect when you can no longer make your own decisions.

You can decide whether one person takes on both roles or choose different people who are more suited to dealing with the different aspects of your life. But the important thing is that you appoint somebody you trust to make decisions for you.

Without an LPA in place, this decision may be made on your behalf by the Court of Protection and they may not appoint the person that you want to look after your affairs.

Waiting too long may cause problems for loved ones

According to research from Lloyds Group, almost a third of people wrongly believe that an LPA is only put in place after somebody becomes ill or has an accident. But in reality, the opposite is true.

You must be mentally capable to set up an LPA in the first place. So, if you leave it until such a time as you need one, this may mean that you are no longer mentally capable and so it is too late!

It is also important to note that an LPA is not only beneficial for older people. You could have an accident or fall ill at any time of life and, if you have not yet appointed an attorney, your family may have limited options.

Without an LPA, they will normally have to apply to the Court of Protection who will appoint a deputy. The deputy takes on similar responsibilities to an attorney, but may have more restrictions in terms of what decisions they can make. The process itself can take months and it is usually more expensive than an LPA too.

Fortunately, you may be able to avoid placing this additional stress on your family by setting up an LPA and appointing an attorney ahead of time.

An LPA can protect your wealth in the future

A clear financial plan helps you protect your wealth, so you and your family are secure in the future. However, that plan could be disrupted if you become ill or have an accident and you haven’t appointed an attorney yet.

The person you appoint can take control of your finances easily, and you can provide them with all of the relevant information like bank details or insurance policy numbers in advance. This means they can continue meeting your financial obligations like mortgage payments or loan repayments so you don’t fall into arrears. They can also manage your investments according to your wishes, and access funds that you may need to cover care costs.

That’s why you may want to consider putting an LPA in place as soon as possible, so you can protect your wealth and continue working towards your financial goals.

Get in touch

We can advise you about putting an LPA in place, and some of the other ways you can protect your wealth in the future. Please visit our contact page or speak to your adviser.

Benchmark Financial Planning is not responsible for the accuracy of the information contained within linked sites.

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.

Important information

The views and opinions contained herein are those of Benchmark Financial Planning. They do not necessarily represent views expressed or reflected in other Benchmark Financial Planning communications, strategies or funds and are subject to change. This document is intended to be for information purposes only and it is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable, but Benchmark Financial Planning does not warrant its completeness or accuracy. The data has been sourced by Benchmark Financial Planning and should be independently verified before further publication or use. No responsibility can be accepted for error of fact or opinion. Benchmark Financial Planning is not responsible for the accuracy of the information contained within linked sites. Reliance should not be placed on the views and information in the document when taking individual investment and/or strategic decisions. Past Performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.

Issued by Benchmark Financial Planning Limited. An Appointed Representative of Best Practice IFA Group Limited which is authorised and regulated by the Financial Conduct Authority, the registration number is 223112. Registered office: Broadlands Business Campus, Langhurst Wood Road, Horsham, West Sussex, RH12 4QP. Registered in England and Wales No 07572431.

Topics

Benchmark Financial Planning is an Appointed Representative of Best Practice IFA Group Limited which is authorised and regulated by the Financial Conduct Authority, the registration number is 223112. Registered office: Broadlands Business Campus, Langhurst Wood Road, Horsham, West Sussex, RH12 4QP. Registered in England and Wales No 07572431.

The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services businesses aren't able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk

The guidance and/or advice contained within this website are subject to the UK regulatory regime and are therefore targeted at consumers based in the UK.