Lifetime Mortgages are for people aged 55 and above, it is possible to take a Lifetime Mortgage when over 90 if the circumstances are right. But with those “golden years” can come health issues, both physical and mental. Here is why Health Questions, Wills and LPA’s are so important.
It is quite possible to be age 55 with a life limiting health condition or age 90 and still be in good health. This is why it is so important to discuss a potential clients health and wellbeing when giving advice.
At the most basic level, some providers will offer preferential terms to an applicant with health issues. This can be important if that applicant requires the maximum amount possible from their Lifetime Mortgage.
More generally, it is important because a Lifetime Mortgage sits in the middle of any “later life financial planning”. It will have an immediate effect on quality of life and it will have a longer term effect on any inheritance that might be left to family and any other beneficiaries.
While, we cannot predict life expectancy, the current health of any applicant will be a factor in any advice given. It is also an indication as to whether a potential client might reasonably expect to go into care in the foreseeable future. In which case a lifetime mortgage is unlikely to suit their circumstances.
Making a Will is an essential part of any long term planning. It is a written instruction of someone’s wishes, taking away any doubt over what is to be done with an estate. It is also a document that will make the administration of an estate that much easier than if there wasn’t a Will. Taking a Lifetime Mortgage often acts as a trigger to have those conversations with family about how an estate is to be dealt with.
Lasting Powers of Attorney
A Lasting Power of Attorney (LPA) is a legal instrument that empowers a trusted individual, known as your attorney, to make decisions on your behalf if you become mentally incapacitated or if you choose not to make decisions for yourself in the future.
There are two categories of LPAs:
- LPA for Financial Decisions: This LPA can be utilized while you still possess mental capacity, or you can specify that it becomes effective only upon your loss of capacity. It encompasses a range of financial matters, including:
- Property Transactions: Buying and selling property.
- Mortgage Management: Handling mortgage payments.
- Investment Management: Making investment decisions.
- Bill Payments: Settling bills and financial obligations.
- Property Maintenance: Arranging property repairs and maintenance.
- Property Transactions: Buying and selling property.
You have the flexibility to define the scope of decisions your attorney can make, permitting them to manage all financial matters on your behalf if desired. When establishing an LPA for financial decisions, it is imperative that your attorney maintains transparent financial records, ensuring that their finances remain separate from yours. You may request regular updates on expenditures and financial status, which can be shared with your solicitor or a family member in the event of your mental incapacity, providing an added layer of security.
- LPA for Health and Care Decisions: This category relates to decisions related to your health and care, and it can only be activated after you have lost mental capacity. An attorney, under this LPA, can make determinations regarding:
- Residential Placement: Deciding where you should reside.
- Medical Care: Authorizing medical treatments and care.
- Dietary Choices: Determining your dietary preferences.
- Social Contacts: Managing your social interactions and contacts.
- Participation in Activities: Deciding on your involvement in social activities.
- Residential Placement: Deciding where you should reside.
Furthermore, you can grant special authority to your attorney to make decisions concerning life-saving treatments, providing a comprehensive framework for handling your health and care needs.
With regard to LPA’s and Lifetime Mortgages, one of the most important things to remember that in joint cases and without a LPA, it will not usually be possible to take any further advances or access any draw down facility.
Don’t make assumptions
If you’re married or in a civil partnership, you might have thought that your spouse could naturally handle your bank accounts, pensions, and healthcare choices if you can’t. But that’s not true. Without an LPA, they won’t have the legal power to do so.
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