During our new client meetings, when we are collecting information to understand what they have, what they want and what they are likely to need, we ask about wills and lasting power of attorney. I am amazed by the number of people who do not have wills and powers of attorney in place, as the impact can be truly devastating.
Anyone who owns property or has children should have a will in place; with children, as a minimum you need to appoint a guardian, as otherwise they will be at the mercy of Social Services. Leaving a valid will in place makes it easier for those you leave behind, as the process of sharing an estate with a will is easier to administer than for someone who died without one.
As for power of attorney, I believe that every person should have at least the financial power of attorney in place, especially if they are in business, as without it, even the most competent and well-meaning of people are powerless to help you in your days of need.
An article in the Daily Mail, 4th February 2015, states the case for a couple dealing with Early Onset Altzheimer’s Disease, (see the original article at http://www.dailymail.co.uk/money/pensions/article-2938541/Why-lasting-power-attorney-help-look-legacy.html), but less commonly, think about what would happen to a business owner, especially a sole trader, after a stroke or traffic accident?
Without a power of attorney in place, you will need permission of the Court of Protection to make decisions on behalf of someone else. Getting that permission can cost thousands of pounds and take months to be put in place, during which time the business is in suspense, unable to enter into new contacts or make changes to existing ones. I am aware of businesses, especially in the buy to let sector, that were ruined by the temporary indisposition of the owner and the complete lack of any deputy to act for the business. In the most extreme example, the bank foreclosed on the mortgages and forced a sale of the mortgaged properties. The bank recovered their money, but the family was seriously disadvantaged, losing both the income generated and considerable value in the portfolio.
Setting up a power of attorney is not difficult, various forms need to be filled in, signed and filed with the Court of Protection. Getting them wrong can cost money, (£55 for re-filing), so take some care or use a solicitor to check them. Registering them with the Court of Protection costs £110 each, so a health and welfare power and a property and financial affairs power of attorney will cost £220 in total. There is much more detail online at https://www.gov.uk/power-of-attorney/overview.
The hardest decision is who to appoint as attorney; the first decision is to do it without delay.
If you would like to know more about how we can help you plan and realise your financial goals then contact us at firstname.lastname@example.org or call us on 01223 792 196.
The information contained is for guidance only and does not constitute financial advice. It is based on our understanding of legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change. Accordingly no responsibility can be assumed by Martin-Redman Partners its officers or employees, for any loss in connection with the content hereof and any such action or inaction.