Advisers are risking potential regulatory issues and good customer outcomes if they do not consider wills and Lasting Power of Attorney (LPAs) when recommending later life lending products, equity release adviser Key Later Life Finance has warned.
According to research from Canada Life, 30% of over-55s do not have wills and 77% do not have an LPA in place.
This, it said, is “putting them and their adviser at risk if they take out a later life lending product”.
Key added this issue is heightened if that product is a lifetime mortgage and if there is a drawdown facility in place.
It said: “Customers without LPAs risk leaving families facing lengthy and expensive Court of Protection action to have control over their finances” whereas having a will speeds up the process and reduces costs.”
Key estate planning director Andrew Parkinson added: “LPAs and wills are critical not just for general peace of mind but specifically for protecting customers’ ability to manage their options in terms of any later life lending product they may hold.
“Should a customer lose mental capacity, no one, including family, can make financial decisions about the mortgage or property without an LPA.
“Without a will an estate will be tied up in a legal process. Having one in place helps families manage all financial affairs smoothly and cuts unnecessary costs.
“Modern families are often blended. A will ensures children from previous relationships are protected as are vulnerable dependents and anyone else that customers specifically want to benefit.”
Key sees estate planning as an essential part of later life financial planning that complements advice and helps clients achieve lasting peace of mind.
