What do you want to happen to your money, property, and assets when you’re no longer around to manage them?
Losing our capacity to make decisions or, worse, passing away is not something we want to spend a lot of time thinking about. However, if you don’t consider what might happen in these scenarios, your hard-earned wealth could fall into the wrong hands.
The last year has taught us that unexpected events can happen at any time. Thankfully, there are some simple steps you can take to ensure that trusted people will manage your affairs when you can’t.
1. A Lasting Power of Attorney
The last few months have shown us that unexpected events can happen at any time. Illness or injury can strike indiscriminately, meaning that you could suddenly find yourself unable to manage your financial affairs.
This is why it’s not just older people who need to make sure they have a Lasting Power of Attorney in place.
The recent case of TV presenter Kate Garraway has highlighted this issue. Kate’s husband, Derek Draper, spent months in hospital fighting the effects of Covid-19. As many of the couple’s bills and insurance policies were in Derek’s name, Kate found that she had struggled to deal with financial matters as she was not the names account or policy holder.
In an ITV interview, Kate explained: “One of the practical problems – which a lot of people would have experienced if they’ve got the absence of someone in their life – like many things, the car is entirely in Derek’s name, the insurance is in Derek’s name, a lot of our bank accounts.
“There are lots of financial goings on which are making life very complicated because I can’t get access to things because, legally, I haven’t got Power of Attorney.”
A Lasting Power of Attorney (LPA) is a legal document which lets you appoint a trusted person (or people) to manage your affairs when you can no longer do so. It ensures that you can nominate someone you trust to make important decisions on your behalf if you lose the capacity to do so or, in the case if financial matters, you no longer wish to do so.
There are two main types of LPA.
This covers matters such as buying and selling property, paying bills, paying a mortgage or rent, investing money, and arranging property repairs. You can restrict the types of decisions your attorney can make or let them make all decisions on your behalf.
Your attorney has to keep accounts and ensure their money is kept completely separate from yours. You can request a regular update of how much is spend and how, and these can be sent to a family member or solicitor if you want an extra level of protection.
Health and Welfare
This type of LPA can only be used when you lose capacity – i.e. lose the ability to make decisions for yourself.
A health and welfare LPA covers health and care decisions such as where you should live, what you should eat, who you should have contact with, and your medical care.
Putting Lasting Powers of Attorney in place is vital if you want to ensure your money and care are dealt with by someone you trust. Without one, a person will be nominated on your behalf. This might not be the person you would have chosen, or it could be a complete stranger appointed by the Court to make decisions on your behalf.
2. A will
There is no better way to ensure your money and assets goes to the right person when you die than making a will.
However, despite this, many people simply haven’t got round to doing so. Recent research from Canada Life shows three in five (59%) UK adults have not written a will. This means that 31 million Brits could see their property, money, and other assets end up in the wrong hands when they die.
Writing a will has several key benefits:
- You can specify exactly who will inherit your assets when you die. If you die without a will (called “intestate”), your assets and money could go to the wrong people, according to the laws of intestacy. If you’re not married to your partner, or if you have stepchildren, they may not receive anything.
- It’s easier for your family and loved ones to deal with your estate. If you don’t have a will, this can cause unwanted delays and hardship. And, not having a will can lead to family disputes and fights over “who gets what”.
- You can name a legal guardian for your children. If you die without a will, the family courts will decide who looks after your children, and this might not be the person you would have chosen. Use your will to name a legal guardian, and benefit from the peace of mind that your children will be cared for by someone you trust.
3. A trust
When you take out life insurance, you do it because you want to make sure that a lump sum goes to your loved ones if something happens to you. So, it follows that you need to make sure that the cash goes to the right people, as quickly as possible.
To do this, you should consider putting your life insurance in trust. This is a simple and effective way of making sure your wishes are carried out – even when you’re no longer around.
A trust is a legal arrangement that enables you leave your assets – including the payout from a life insurance policy – to your chosen beneficiaries.
One or more trustees (appointed by you) manage the trust until it pays out to your beneficiaries. Where a life insurance policy is concerned, this happens on your death.
A trust enables you to keep control of your assets, and ensure they go to the people you want them to on your death. You decide who to appoint as your trustees and beneficiaries, so you can nominate trusted people to control the money, and the people who will benefit from the trust.
Putting your life insurance in trust is especially important if you’re not married or in a civil partnership as, otherwise, your assets may not be transferred to your chosen beneficiaries.
When you buy life insurance, the insurer will be able to put the policy into trust for you. We can also help with putting your life insurance policy into trust. Head to our website to compare life insurance quotes and get in touch with us if you need any assistance in placing your policy into trust.
Putting the right protection place means your loves ones will be financially secure
Whatever arrangements you make to ensure your wealth passes to the right person, it’s important that you have financial protection in place.
You will want to make sure that your family can remain in your home, that your children and partner are provided for, and that your income can be replaced if you’re no longer around.
We can help you get the right protection for your needs. We work with dozens of the UK’s leading insurers to get the right cover at the right price, so please get in touch to find out how we can help you.
Most over-50s didn’t have life insurance in place in 2020 – why you’re not too old for cover
May 24, 2021
Relaxing Hotspots: The Best UK Destinations to Escape for a Wellness Break
May 17, 2021
Why delaying putting insurance in place means you’ll often pay more
May 12, 2021
How improving your “money mindset” can give you financial security
May 5, 2021
3 types of business owner insurance you should consider if you run your own company
April 24, 2021
Types of Life Insurance
April 23, 2021