What would happen to your finances if you had an accident?

Have you ever considered what would happen to your finances if you had an accident or were unwell and unable to deal with your affairs?

Many people haven’t, because they think ‘oh, that wouldn’t happen to me’, or they imagine that someone else could just take over. But it is something that everyone should think about because the answers are not necessarily simple.

The coronavirus pandemic has really highlighted how unpredictable life can be; as we get back to our ‘new normal’, it is important that the correct legal documents are in place to protect our loved ones. The last 18 months have shown how easy it is for someone to become seriously unwell and families have been left to navigate their finances without formal authority from that person, who may even have lost the ability to manage their finances.

Even if you have a joint account with someone, they would not necessarily be able to make withdrawals from that account if the bank is aware that one of the account holders has lost capacity. This is where a Lasting Power of Attorney (LPA) would resolve this issue.

If you were in a car crash or had a stroke or heart attack, you might not know how long you were going to be in hospital for; if your spouse or loved one isn’t authorised to pay bills to utility companies, or manage your bank accounts, they might have difficulty dealing with day to day matters.

In these circumstances, an LPA could be prepared; they can act as an ‘insurance’ if something unexpected did happen to you. Your LPA allows another trusted person (whoever you choose as your ‘attorney’ – they do not need to be legally qualified) to assist if financial or health matters need to be dealt with and you are not able to do so. It may be that you are simply not available to deal with such issues whilst you are in hospital and are recovering.

Each LPA is tailored to a person’s specific and likely needs, including safeguards and advance instructions to make sure they are fit for purpose and give the attorneys the authority they need.
LPAs do not give your attorney permanent control over your finances or healthcare but once they are drawn up, they are ready if they are needed.