More women are now recognising that making a will and getting their power of attorney in place is vital. Here's everything you need to know on the topic.
When it comes to personal finance, gender equality still has a way to go. Despite the fact that 85% of women control their families’ day-to-day finances, many hold back when it comes to ensuring that important matters – such as who to pass on an inheritance to or putting someone they trust in charge of their affairs – are set up in accordance with their wishes.
However, things are beginning to shift up a gear, with more women taking control of their own financial planning. Sue Wakefield, Director at Zedra, a fund solutions provider, says: “Women now own 36% of small businesses worldwide and women are increasingly the primary earners in households in the UK.
Despite these positive changes, until recently, women have often overlooked safeguarding their wealth and assets and protecting their families in the event of their death or incapacity.”
Industry statistics back this up – more wills are now written by women (51.74%) than by -men (46.2%), according to WillSuite’s 2020 Annual Report.
What should I consider when making a will?
With a will, you can dictate exactly who gets what. Your wishes can be as simple or as detailed as you like, provided that yourâ¯solicitorâ¯ensures they are legally binding. You can ensure your family members are taken care of, leave assets or specific items to wider family and friends, make contributions to charity and ensure your overall legacy.
Most importantly, you can specify who will care for any dependent children you leave behind. If you die without a will – known as 'dying intestate' – then UK law determines who inherits your assets. This may not be as you would have wished – and it will certainly take much longer for your beneficiaries to inherit.
Can I write my will myself?
You’ll also need to appoint executors too to oversee the distribution of your estate, who will liaise with any professionals or organisations on behalf of your beneficiaries. You should appoint at least two people to do this. They don’t need any experience – but do choose people who are confident dealing with official matters.
You’ll also need at least two witnesses to read and sign your will, and these should not be beneficiaries.
What is a power of attorney?
Power of attorney is a legal document where one person (known as the donor) gives another person (the attorney) the right to make decisions on their behalf. Putting in place a lasting power of attorney (LPA) can give you peace of mind that someone you trust is in charge of your affairs.
When you set up an LPA, you choose a person – your ‘attorney’ – to act on your behalf and make decisions in your best interests. Your attorney can be any adult you trust to make the right decisions for you, so they may be a close friend or relative or a professional, such as a solicitor, who you pay to fulfil the role.
If your chosen attorney is not a professional, give them plenty of time to consider before agreeing to the role, as it is a huge responsibility.
Are there different types of powers of attorney?
LPA is the most common form of power of attorney. This is an ongoing arrangement with no expiry date that will allow another person to make decisions on your behalf. Once the document is registered with the government, through the Office of the Public Guardian, it can be used immediately, with your permission while you still have capacity, or it can take effect from when you lose mental capacity. There are two types of LPA:
Property and financial affairs LPA – This gives your nominated attorney the power to make decisions about your money and property, including managing bank or building society accounts, paying bills, collecting a pension or benefits, or, if necessary, selling your home.
Health and welfare LPA – This gives your attorney the power to make decisions about your daily routine (washing, dressing, eating), medical care, moving into a care home and life-sustaining medical treatment. It can only be used once you are unable to make your own decisions.
There’s also an ordinary power of attorney, which gives another person authority to act on your behalf for a limited time period. This can be useful if you want someone to make decisions for you temporarily – for example, while you’re recovering from an injury or illness, or if you’re taking an extended overseas trip.
You can specify a time period for an ordinary power of attorney or restrict it to specific activities. You don't need to register this document with the Office of the Public Guardian.
Why do I need a power of attorney?
What would happen if you’re suddenly unable to make your own financial and welfare decisions? It’s not something that anyone wants to think about, but it’s far better to put a plan in place so you’ll have peace of mind that your wishes will be met, exactly as you want them to be.
While you may thank that your partner or close family members will automatically make decisions for you if something happened to you, this is not the case.
Unless you've set up a power of attorney, your loved ones would need to apply through court to access your money, which can be a long, drawn-out and expensive process.
When should I set up a power of attorney?
While we associate poor health with old age, anyone of any age could have an accident or illness that affects their ability to manage their affairs. This is why setting up an LTA should be part of every woman’s long-term financial planning, to protect themselves and their family.
Importantly, an attorney can only be appointed when you are still able to make decisions yourself, so it’s vital not to leave it too late – yet less than 1% of people in the UK have an LPA, according to official figures.
Can I set up a power of attorney myself?
To register a power of attorney, you'll need to submit the following forms to the Office of the Public Guardian. LP1F – to register an LPA for financial decisions LP1H – to register an LPA for health and care decisions.
You'll also need to send out form LP3 to anyone identified as a 'person to be told'. You can do this yourself or you may prefer to appoint a solicitor handle the application for you.
It’s a tough thing to think about, but it really is important to make a will and get a power of attorney in place.
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If you found this article helpful, you might also find our article exploring whether woman are better investors than men informative, too.