It’s not the easiest question to think about.
Most of us spend years building our savings, investing for retirement and making sensible financial decisions. But what would happen if illness, an accident or a condition such as dementia meant you were no longer able to manage your own finances?
Would someone you trust be able to step in and help?
Many people assume the answer is yes. Unfortunately, it isn’t always that simple.
A Will and a Lasting Power of Attorney are not the same thing
One of the biggest misconceptions we come across is that having a will means everything is covered.
A will is incredibly important, but it only comes into effect after you’ve died. It sets out what happens to your estate and who should inherit your assets.
A Lasting Power of Attorney (LPA) is completely different.
It allows you to appoint people you trust to make decisions on your behalf while you’re still alive if you’re unable to make those decisions yourself.
For your finances, this is known as a Property and Financial Affairs Lasting Power of Attorney.
Without one, your loved ones could find themselves unable to help, even if they know exactly what you would have wanted.
What happens if you lose mental capacity without an LPA?
This is where things can become difficult.
If you lose mental capacity and don’t have a Lasting Power of Attorney in place, nobody automatically has the legal authority to manage your finances.
Instead, your family may need to apply to the Court of Protection to become your deputy.
This process can be lengthy, expensive and stressful at a time when emotions are already running high. It can take months before anyone is able to access accounts, make financial decisions or deal with ongoing commitments.
In the meantime, everyday financial matters don’t simply stop.
Who would pay the bills?
Think about everything that needs managing each month:
- Mortgage or rent payments
- Household bills
- Bank accounts
- Credit cards
- Investments
- Pension income
- Insurance policies
- Tax matters
Someone needs to keep all of these running.
If you already receive income from your pensions or investments, those arrangements may also need ongoing management to ensure they continue meeting your needs.
Having an LPA means someone you’ve chosen can step in and keep everything running as smoothly as possible.
Your husband, wife or children can’t automatically do it
This often surprises people.
Many married couples assume they’ll simply be able to take over each other’s finances if something happens.
Likewise, adult children often believe they’ll be able to help a parent if needed.
In reality, banks, pension providers and investment companies cannot simply hand over control because someone is your spouse or son or daughter.
Without legal authority, organisations may not be able to discuss accounts or allow decisions to be made.
An LPA provides that authority.
Choosing the right people
One of the most important decisions is choosing who will act as your attorney.
This should be someone you trust completely.
They should be:
- financially responsible
- organised
- willing to take on the responsibility
- able to act in your best interests
- comfortable making potentially difficult decisions
You can appoint more than one attorney if you wish, and you can decide whether they must make decisions together or can act independently.
There’s no single right answer—it depends on your family circumstances and who you feel would be best placed to help.
Make life easier by keeping your finances organised
Even with a Lasting Power of Attorney in place, it’s much easier for your attorneys if they know where everything is.
It can be helpful to keep an up-to-date record of:
- bank and savings accounts
- pensions
- investments
- insurance policies
- mortgages or loans
- regular household payments
- important contacts such as your solicitor and financial adviser
This doesn’t mean leaving passwords lying around, but having an organised record of your financial arrangements can save a huge amount of time and worry.
Make it part of your wider financial plan
A Lasting Power of Attorney shouldn’t be viewed in isolation.
It works best when it’s considered alongside the rest of your financial planning.
For many people approaching retirement, this means thinking about:
- how retirement income would continue if they became unable to manage it
- whether investment decisions may need reviewing in future
- making sure wills remain up to date
- considering inheritance tax planning
- ensuring family members understand the overall financial picture
When all these areas work together, it creates a much stronger plan for both you and your loved ones.
Planning ahead gives everyone peace of mind
None of us knows what the future holds.
Putting a Lasting Power of Attorney in place isn’t about expecting the worst—it’s about making sure the people you trust can help if life takes an unexpected turn.
It’s one of those decisions that many people postpone because they hope they’ll never need it.
The reality is that, if the time ever does come, having it already in place can remove a huge amount of stress for your family and ensure your finances continue to be managed in the way you would have wanted.
How we can help
At Lazenby’s Financial Services, we regularly help clients think about the bigger picture. Retirement planning isn’t just about building wealth—it’s also about protecting it and making sure the right plans are in place for the future.
If you’re reviewing your retirement plans, updating your estate planning or simply want to understand how a Lasting Power of Attorney fits into your overall financial strategy, we’re here to have a friendly conversation.
Planning ahead today could make all the difference tomorrow.
