Most people have a plan when they buy a house. That plan is to own it, live in it and leave it to their next of kin when they no longer need it. The assumption buyers have is that they will always be fit and healthy, nothing will ever go wrong, and that the garden will always be rosy. Of course, everyone knows that this is not always the case, and can probably name someone they know who has had a life-changing event that affects then financially, but they just choose to ignore it when they buy their home.
A backup plan is what happens when things go wrong. It’s a promissory note that allows people you care about to continue to either live in their home or benefit from the asset.
When a lender agrees your loan, the assumption is that they’re lending the money based on you always earning at least the amount you earn now. You talk to most families and within 5 years, a lot of things will have changed – not always for the best. Imagine trying to guess what changes may affect you over an average 25-year mortgage term.
A key question to ask yourself is how will you continue to afford your new mortgage payments and family lifestyle cost if you lost the main or either incomes due to illness, accident or death?
It tends to be a hard conversation to start with. Most people assume they’re not going to get a serious illness and in fact, there are actually a few who don’t think they’re going to die which I can guarantee they will!
Unfortunately, though medical science has improved people’s lives tremendously it has also caused financial hardship for many. What I mean by this is that when it comes to talking about insurance products, it used to be that everyone bought life insurance because statistically there was a big percentage of the population that would die before retirement. That is not the case anymore and that may be partly due to advances in medical science
By talking about it and planning for any eventuality, you can make sure you get the right cover that pays at the right time to the right people. Giving you peace of mind to enjoy your dream home.
Here at Asset Plus, we don’t simply stop at your insurance requirements. A key part of backup planning is deciding what happens to your assets in the event of your death.
The vast majority of people in the UK will not have a Will. A Will is an expression of your wish, of what you want to happen when you are no longer here.
Families are more complicated now than they have ever been People often get married more than once, they may have children with different partners and so on. All of these things can complicate what happens to people’s assets when they die. One way to overcome any issues is to write down what you want to happen, your wishes, in the form of a Will.
A will is also hugely important for families with dependent children. If you have not appointed people to look after your children, the courts will take over and the children could go into care. A situation no family wants to find themselves in.
Lasting Power of Attorney
In addition to Wills, we also talk about is who will manage your financial affairs should you lose the mental capacity to make your own decisions. If you were in a serious accident and were in a coma or perhaps you developed a form of dementia (sadly, all too common nowadays), all your assets will be locked down. The courts decide what happens to them – it doesn’t matter whether you are married or not. Your wife, for example, will not be able to go into your bank account and take your money out.
We recommend to people that they have what’s called Lasting Power of Attorney.
The idea is that by providing Power of Attorney for all financial and health matters, you appoint someone to make those decisions on your behalf. So, someone you trust – it could be your wife or your children; depending on their age.
So a Will expresses your wishes when you die. Powers of Attorney are if you survive, but you cannot make sensible decisions.
Without these plans in place, you will have to go through the court of protection to get things released, and that could take 6 to 12 months to try to get things organised.
For more information on any Back-Up plan provision or your own individual requirements, talk to us today on 01628 563355
Wills and Lasting Powers of Attorney are not regulated by the Financial Conduct Authority.
asset plus+ Mortgage Solutions is a trading style of asset plus+ Financial Ltd, an appointed representative of The Right Mortgage Limited, which is authorised and regulated by the Financial Conduct Authority.
Registered in England no: 05859399. Registered Address: Umpleby Accountancy, Basepoint Business Centre, Bridge Road, Haywards Heath, West Sussex RH16 1UA
There will be a fee on completion for advice. The precise amount will depend upon your circumstances, but we estimate that it will be £300.