The Benefits of being Financially Organised
Being organized, financially speaking, for potential problems in the future can be a chore, and a lot of people don’t like the thought of doing it. This is understandable, but it is important to remember that by doing so, you’ll not only be making your life easier should you fall ill, but you’ll also be taking a burden away from your loved ones should the worst happen. If you’re wondering whether to sort out your finances or not; keep them in mind. People often find that family is the main motivation.
Power of Attorney
Organizing a power of attorney would really pay off if you ever became too ill to look after your finances on your own. This could happen if you lost mental capacity due to an accident or a degenerative illness or simply if you had to spend a long time in hospital and were too ill to access your accounts, for example.
There are two types of power of attorney; ordinary and lasting. Ordinary power of attorney gives someone you trust a temporary right to handle your finances. This can include paying your bills, debt installments and paying for things which can help with your care. This kind of attorney is best if you’re stuck in hospital for a period of time or if you’re expected to fully recover from your illness.
Lasting power of attorney is a more permanent solution and gives someone else the right to deal with your affairs indefinitely. If you lose the mental capacity to look after your own finances, this nominated person would be able to access your money for you so that you’re able to honour payments and be able to pay for your own care should you need it. This type of attorney should be set up in advance of you needing it, as once you’ve lost the mental capacity to make decisions on your own, your family would be looking at a long and expensive process in order to gain control over your money.
Power of attorney can cost around £150 and can be set up with a solicitor or you can fill in the forms yourself. You can get the forms from the Office of Public Guardian or from www.gov.uk.
Writing a Will
A will is something which details who will receive your belongings and your money when you die. You can share out your assets in whatever way you like, but if you don’t have a will then your things will be divided according to the law. This means that if you’re not married to your partner then they wouldn’t be entitled to anything when you die. If you are married, your partner may get everything and your children could get nothing, and if you have no close relatives then everything you own may belong to the Crown or to the government.
Obviously, people are going to have different ideas of where they would like their property and their money to go if the worst happened, so going without a will is not always the best case scenario. Some people want to leave things to close friends or charities, for instance and to do this then they would need a will.
There are three ways to make a will, each costing differing amounts. The cheapest way to go about it is to do it yourself with a will template (available at stationers and post offices). These usually cost around £10 but should only be used if your finances are very straight-forward. Changing laws and complicated rules can make this option difficult and if you do it wrong then your will could end up being void when you die.
Going through a will writing service or a solicitor costs a bit more (it can be anything from £75 up to £300) but are better options if your will is more complex or if you want something which you know is going to be legally binding when you die.
Try to look at preparing your finances like this as an investment for the future, and as a gift for those you love. By being organised, you’ll spare them additional stress and expenditure and your money will be dealt with exactly how you want it to.
