Lifetime mortgage customers missing out on legal advice

Lifetime mortgage customers are entering the advice process without the legal safeguards to protect their wealth in later life, research published by Hub Financial Solutions has indicated.

According to a study among 1,043 UK adults over the age of 55, only one in five (20%) customers seeking advice had no will in place setting out their wishes for their estate.

However, the equity release provider found that more than eight in 10 (84%) had not organised Power of Attorney, despite the protection this provides in the event of accident, illness or declining health.

HUB Financial Solutions highlighted that the figures are broadly in line with research from its parent company, Just Group, which suggested that more than one in 10 (12%) over-75s had no will in place and 70% had not arranged Power of Attorney.

HUB Financial Solutions managing director, Simon Gray, said that advisers have an “important role” in encouraging more people to put in legal protections in place to safeguard their interests in later life.

“It’s not easy thinking or talking to family about the ‘what ifs’ but it is always worthwhile to have that peace of mind,” said Gray. “It helps avoid situations where family members have to navigate extra obstacles at a time of emotional distress.”

He also highlighted the importance of formal Power of Attorney documents which give responsibility to a trusted party to make financial or health decisions on behalf of the donor.

Gray added: “Married couples assume that if one partner loses capacity then the other can just step in, and children often assume they can pick up matters on behalf of parents, but they won’t have the authority unless a Power of Attorney is in place.

“Leaving it too late means applying to be a deputy to the Court of Protection which can be expensive, time-consuming and offers more limited authority.

“Financial advisers are well positioned to explain the importance of these legal documents at a time when clients are looking to proceed with significant financial decisions such as accessing a pension or taking out a lifetime mortgage.

“Advisers may also be able to recommend trusted legal partners that specialise in estate planning, and help assess the value of assets in the estate alongside any tax issues the client may be unaware of but want to consider.”

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