Reports of recent research conducted by LV= have shown that 48% of all equity release customers took their plan because of a need to renovate.
Analysis of the renovations revealed that these were more likely to be essential modifications such as widening doors for wheelchair access or installing a stair lift than non-essential such as conservatories.
“The nature of these renovations gives us a good indication of the personal circumstances of many equity release clients and points to a legal need that they may not be aware of,” said Richard Espley, head of equity release at Goldsmith Williams.
“These particular modifications indicate that the clients are experiencing health problems. All clients with failing health should take up a Lasting Power of Attorney before their health declines further. An LPA for Health and Welfare will appoint an attorney to make decisions on another’s behalf regarding care and healthcare whilst an LPA for Property and Financial Affairs gives the attorney authority to handle property and financial affairs on behalf of another and can for example give the attorney authority to arrange an Equity Release drawdown. If there isn’t an LPA for Property and Financial Affairs in place and an Equity Release drawdown was required then an application would have to be made to the Court of Protection. Proceeding through the Court of Protection can involve considerable expense and uncertainty.
“Health problems can often happen without warning – a stroke is a good example of this and the risk of further complications is never far away if you do have a chronic condition. It makes sense to prepare ahead for these eventualities. I believe that clients should be made aware of the protection afforded by a Lasting Power of Attorney when they take up an Equity Release plan. Introducers who highlight Lasting Powers of Attorney and guide their clients to a specialist law firm to deliver this service can add further value to the relationship they have with their client.”
