Protection  

What crisis teaches us about having a holistic approach

  • Explain how current crisis has exposed poor levels of protection
  • Explain how LPA can work effectively
  • Identify ways in which advisers can guide clients
CPD
Approx.30min

The first of these allows the person given power of attorney to make medical decisions on behalf of a loved one, should they become unable to act on their own behalf through ill health.

The second gives similar permission over financial affairs. Thinking about these situations, while not pleasant, promotes conversations within families that need to happen while everyone concerned is still well and happy. 

So the best time to set up a lasting power of attorney is now, as it is an incredibly difficult and time-consuming process once someone becomes incapacitated due to ill health.

Your clients may believe the myth that once an LPA has been put in place, they’ve lost control of their finances.

This is of course untrue, and it’s important to set the record straight. Disabuse them of these myths by explaining how the lasting power of attorney works.

The attorney can only look after the donor’s affairs if they lose mental capacity or develop (or think they may develop) an illness that may stop them making decisions for themselves. 

It’s important to make sure that they are absolutely clear on their rights under the lasting power of attorney. You can reassure them by explaining that the appointed attorney must:

  • encourage the donor to be part of the decision wherever possible
  • consider the donor’s past and present feelings
  • talk to people the donor knows who can suggest what might be in the donor’s best interests.

You should also spell out the specified set of duties that those holding lasting power of attorney must adhere to:

  • the duty of care
  • the duty to carry out the donor’s instructions
  • the duty not to delegate authority, unless it’s specified in the LPA
  • the duty of confidentiality – except when the donor has agreed personal information can be disclosed, say to an accountant, or because it’s in their best interests.

Adequate protection?

Perhaps one of the reasons so few households have life insurance in place is because it’s human nature to avoid thinking about death.

But when a family is grieving, having to deal with intestacy and loose ends, having to find money for an expensive funeral will only add to their pain. 

These are not easy subjects to broach, but we have a duty to encourage our clients to talk through the issues with their relatives, help families weigh up their options and make sure they have the protections and insurance cover that they need.

That might be life cover, critical illness cover, income protection, funeral plans, or other provisions. 

We regularly hear stories of clients who suffer a serious illness and do not know that their insurance covers them for that particular condition.

It’s our job as financial advisers to keep educating our clients with this important information and to ensure that the family knows what to do if the insured is incapacitated.

It is also important that they know they can come to you for advice on their policies should the worst happen. 

CPD
Approx.30min

Questions appear on the last page of this article.