I am in my late seventies and in good health. My wife thinks we should put Powers of Attorney in place at this stage but all our bank accounts are in joint names, so I don’t see the point. I have investments in my name but don’t really want to pass control of them to her at this stage, as my wife and I have very different ideas about investments. What do you think?

North Norfolk News: Phil Beck is an Independent Financial Adviser with Smith & PinchingPhil Beck is an Independent Financial Adviser with Smith & Pinching (Image: Smith & Pinching)

Phil Beck of Smith & Pinching responds:

Lasting Powers of Attorney (LPAs) are an important part of anyone’s financial planning and, to be frank, I believe everyone should have them set up, just in case. There’s a common misconception that the LPA gives access and permission for the person you’ve appointed to meddle in your financial affairs immediately, but an LPA can only be invoked with your permission or when you lose capacity.

There are two principal types of LPA: one covers your health and welfare and the other property and financial affairs.

With a health and welfare LPA, you give your appointed attorney permission to make decisions about your personal care. This would cover your daily routine, such as washing, dressing and preparing food plus your medical care, moving into a care home and getting life-sustaining treatment. These decisions can only be made by your attorney if you are unable to make them yourself.

A property and financial affairs LPA allows your attorney to make financial decisions on your behalf. This can be used as soon as it is registered, but only with your permission. If you were to lose capacity, it can be used but you would have the opportunity to object if you felt it wasn’t needed.

Importantly, your appointed attorney must act on your behalf and follow your wishes and preferences, so if your wife is prepared to take on the role, she must understand this. You could make your views very clear by writing an Expression of Wishes document that records your investment preferences and other financial decisions such as regular gifts and favourite charities.

Even if your bank accounts are in joint names, there will be circumstances when you and your wife have individual contracts with different organisations. In addition, your investments may need monitoring and adjusting over time and this may necessitate contact with the provider. It may also be necessary to deal with taxation matters – submit a tax return, for example – during a period of incapacity.

The process of getting authority to act for someone who has lost capacity and who hasn’t set up an LPA is lengthy and complex. I strongly recommend that you talk to your solicitor and get LPAs in place for both of you.

Any opinions expressed in this article do not constitute advice.

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