I was asked to assist in a scenario where a husband had died suddenly. He was the owner of the business and sole signatory to the family and company bank accounts. The family couldn’t access their bank account to pay bills, and they couldn’t access the company account to pay staff. When I became involved, this had been running for four months. The staff were brilliant and had worked for no pay and used their savings. Other debtors were less helpful.
He hadn’t left a will and there was no power of attorney. The bank hadn’t experienced this before, and the widow spent hours every day being passed from pillar to post. On top of the stress of the very tragic death, she was somehow having to deal with all of this. The bank eventually yielded, and everything was sorted.
Naturally, any business should not have just one signatory given the above, nor should we have our personal accounts in just one name for the same reason.
Life is unpredictable, but two key legal tools - lasting power of attorney (LPA) and a will - can give you control and peace of mind, ensuring your wishes are respected while protecting your loved ones from unnecessary stress.
An LPA allows you to appoint someone you trust to make decisions on your behalf if you’re unable to do so due to illness or incapacity. It’s a safeguard, ensuring the right person manages your affairs when you can’t.
Without an LPA, if you lose the ability to make decisions, the courts may step in. This process is costly, time-consuming and can lead to someone being appointed who may not fully understand your wishes. With an LPA, it ensures your preferences are followed and keeps the decision-making in the hands of people you trust.
From a practical perspective, an LPA makes things simpler for your loved ones. Your attorney will have clear legal authority, making it easier to deal with banks and medical providers, avoiding bureaucratic delays and legal hoops during an already difficult time.
An LPA also reduces emotional strain. When your wishes are clearly outlined, it removes the uncertainty and potential conflicts among family members over who should make decisions. This clarity helps avoid disputes and ensures your family can focus on supporting you rather than debating your care or financial choices.
It’s often worth seeking legal advice to ensure your LPA reflects your wishes accurately and your family solicitor who will draw up your Will is also an obvious choice.
While an LPA protects you during your lifetime, a will ensures your wishes are respected after your death. Without a will, the distribution of your estate will follow the rules of intestacy, which might not align with your preferences. For instance, if you’re married with children, your spouse will receive a portion of your estate, while the rest is divided among your children. Unmarried partners or friends are left with nothing unless specified in a will.
A will gives you control over how your assets are distributed, ensuring your loved ones are taken care of in the way you choose using the executors you appoint. Without a will, the courts will appoint someone to handle this, which can lead to delays or even mismanagement.
A will is essential for naming guardians for your children. Without one, the decision may be left to the courts, which could result in arrangements which don’t reflect your wishes. By naming guardians, you ensure your children will be looked after by people you trust.
Wills also help minimise family disputes. Grief can amplify tensions, and having a clear, legally binding document in place helps prevent arguments over inheritance. A well-drafted will provides clarity and helps maintain harmony within the family during a difficult time.
Both an LPA and a will offer crucial protection. They give you control over your future, reduce the burden on your family and ensure your wishes are followed. By putting these documents in place, you can safeguard your interests and provide your loved ones with the security they need, no matter what the future holds.
- Peter McGahan is chief executive of independent financial adviser Worldwide Financial Planning, which is authorised and regulated by the Financial Conduct Authority. If you have a financial query, call 028 6863 2692 or email info@wwfp.net
