Financial Focus Sept Oct 2019 Newsletter

The lasting power of peace of mind More people are now setting up Lasting Powers of Attorney (LPAs), not just those in later life. Often written alongside a will, these important legal documents allow you to appoint one or more trusted representatives or ‘attorneys’ to take charge of your finances and/or welfare if you are unable to take look after your own a airs at some point in the future. The growing use of LPAs is hardly surprising given the ageing population, but it is a mistake to think that they are just for the elderly. Anyone over the age of 18 can set up an LPA – after all, accidents or illness can occur at any point in life. In England and Wales there are two types of LPA – one covering health and welfare and another for property and financial a airs. You can set up either or both types and appoint the same or di erent attorneys for each one. For LPAs to be legally valid, they need to be signed, witnessed and registered with the O ce of the Public Guardian, which costs £82 for each LPA. In Scotland, Powers of Attorney are slightly di erent. Property and financial a airs LPAs are not just for people with substantial assets. At the simplest level, they can allow your designated attorney to access your bank account and ensure that essential bills get paid. When it comes to choosing an attorney, you can pick a spouse, partner, relative or friend or even a professional, such as a local solicitor, although remember that they are likely to charge for this service. The stipulations are that your attorney must be over 18 and mentally capable of making decisions for themselves. Bankrupt individuals cannot be appointed for financial LPAs. LPAs do not automatically give attorneys immediate access to your finances. In fact, you have to give express permission before an attorney can use the powers granted under a property and financial a airs LPA, although it can be used as soon as it has been registered. You have to be deemed mentally incapable of making your own decisions before a health and welfare LPA can take e ect, for example, if you have dementia or are in a coma after a car crash. People often choose to set up an LPA when they are writing their will. Many LPAs are never put into e ect, but having one can provide peace of mind that a trusted friend or relative would look after your a airs if your health failed. ✢ The Financial Conduct Authority does not regulate will writing, trusts and some forms of estate planning. 2 To say we’re living in interesting times may feel like an understatement. It’s almost impossible to avoid the headlines whether you focus on Brexit, international markets or climate change. But can that focus actually harm your long-term investment strategy? Recent research has shown almost three-quarters of investors are influenced by short-term political developments. However, as our feature explores, taking a long-term view may be more productive for your portfolio, and less stressful. We also investigate some developments on inheritance tax which could have important implications for your estate planning. And for those sending children to university this autumn, a report on the structure of student finances could play a role in future funding. With additional pieces on pension contributions and cash flow planning into retirement, that long-term view may work in more ways than one. 03 Simplifying the inheritance tax rules Potential changes could have an impact on your estate planning 04 Taking the long view on your investments? Holding steady through volatility can benefit your investment outcomes 05 Homing in on capital gains New tightened rules on gains from residential property sales come in from next year. 06 Time for a university fees shake-up? A review of post-18 education may lead to a shake-up in student funding 07 Workplace pensions – good start but not enough Auto-enrolment is seven years old, but pension contributions are still under-funded 08 Future-proofing your retirement finances Get a grip on your expenditure and income with focused cash flow planning In this issue... This newsletter is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before takingor refraining from takinganyactionon thebasisof thecontentsof thispublication. Thenewsletter representsourunderstandingof lawandHMRevenue&Customspractice. © Copyright 5 September 2019. All rights reserved. PLANNING Cover image: iStock/Nikada iStock/Pablo_K iStock/Jasmina007 iStock/natthanim