Putting a Power of Attorney in place is often a task that’s overlooked. But it’s one that should be done alongside a wider financial plan.

Having a Power of Attorney in place is essential. Yet millions of Brits haven’t taken the time to organise this important document. It’s something that should be done alongside a financial plan to provide security and peace of mind about the future.

No one wants to think about becoming too ill to make their own decisions but having a Power of Attorney in place is something that can provide security. Despite this, many people haven’t taken the step yet. It’s an issue we’re sure you’ve encountered when working with clients.

Even those that do have a Power of Attorney in place may not have made the decisions with their financial plans and aspirations in mind.

Among the reasons to consider both a Power of Attorney and financial plans side by side are:

1. Understanding their financial position

It can be difficult for clients to make decisions about the future without understanding their current financial position and how it may change in the future.

A financial plan can provide certainty and explore how a client’s finances, and therefore situation, may change in the short, medium and long term. It’s a process that can highlight why a will and Power of Attorney may be needed and how it can help keep aspirations on track. It can also provide reassurances that they’ll be well looked after and secure even if something does happen.

For example, a Power of Attorney may need to make decisions about care, potentially for the long term. For clients who know they have assets that can be used to provide the level and type of care they want, should it be necessary, it can be a weight off their mind.

2. Planning for ‘what-if?’ scenarios

When we set out a financial plan, it’s with long-term aspirations in mind. But we’re mindful that obstacles can get in the way, including those factors that clients have no control over. For this reason, we often include ‘what-if?’ scenarios in our cash flow planning to minimise risks. From a financial perspective, this could include:

• What if an economic downturn affects the short-term performance of investments?
• What if a loved one passed away, reducing income?
• What if I took a lump sum out of my pension in early retirement?

Writing a Power of Attorney supports these steps. After all, no one makes plans believing that in ten or twenty years time they’ll be unable to make their own decisions about these. Putting together a financial plan aims to provide security and peace of mind, even when the unexpected happens, this includes illness or accidents. As a result, we advise clients to ensure they have both a will and Power of Attorney in place, which are then regularly reviewed to ensure they still align with their wishes.

3. Setting out financial wishes to loved ones

Finally, a loved one with a Power of Attorney may need to make decisions relating to property and financial affairs. This can be incredibly challenging at what is already a difficult time.

A clear financial plan will include goals, aspirations and long-term considerations. A plan can help provide a loved one with some direction when they’re deciding what to do. It may help answer questions such as:

• Would they want me to sell their home?
• What did they want to leave behind for children and grandchildren?
• What long-term savings can be used to fund care or living costs?

Of course, a Power of Attorney must act in the best interest of the individual that is unable to make decisions themselves. However, a written financial plan can help align the wishes of a client with the steps a Power of Attorney takes. Creating a financial plan is an opportunity to think about what they’d want to happen and, if appropriate, discuss this with loved ones. In some cases, it can provide confidence that their wishes will be followed even if they’re unable to take the steps themselves.

Helping clients plan for the future

At Beaufort Financial we help our clients plan for the future, giving them confidence in their financial security. This includes writing a will and Power of Attorney to provide peace of mind that should the worst happen, they are still financially secure, or their wishes are followed. We believe these steps should combine financial and legal expertise so that individuals can benefit from peace of mind. If you’d like to find out more about working together, please get in touch.