LEGAL

PENSIONS DRAWDOWN AND LPA’S

In April 2015, legislation was introduced which changed how pensions could be drawn at retirement.

These changes have encouraged more people to look at using an Income Drawdown plan to keep their pension invested and to take the income they need directly from the pension pot. A suitable Income Drawdown plan could keep the saver’s pension pot intact right up to the time of their death; at which point it can be passed onto beneficiaries.

However, despite the positives of drawing a pension in this manner, there is as we see it a risk which should be managed carefully. If a retiree decides to keep their pension pot invested and to draw their income from the pot, there is a growing risk of the retiree becoming physically incapable and/or losing their mental capacity – whilst their pension is still invested, producing income and requires “managing”.

Even a spouse can struggle to properly control these matters. It can be complicated, timely and could result in court intervention at a high cost.

Fortunately the simple step we would advise you to take is to prepare a Lasting Power of Attorney (LPA). This is a legal document which provides for one or more people to make decisions on the individual’s behalf. It comes into effect should the individual become incapacitated and unable to manage their own affairs, at some point in the future.

LPS’s are not only utilised in respect of Pension Drawdown, but in all aspects of financial management such as paying utility bills, writing cheques and/or selling property.

Directors of companies or sole traders should also consider the benefits of business LPA’s.

Any LPA introduced should be professionally written, by a specialist, because it is a document which may need to cover many different situations and used in different ways under different circumstances. The wording of the LPA should be precise to cover the exact powers you wish to give to your attorneys.

In summary, the new pension rules open many fresh opportunities for those coming up to retirement and looking to draw on their pensions, financial advice should be taken to explore all your options. An LPA (properly written) will protect against issues should this ill health cause the individual to lose their ability to manage their own affairs.

SWANSEA | MUMBLES | PORTHCAWL | CARDIFF |

01792 65 00 00

HOW TO PREPARE FOR A SEPARATION

For family lawyers, the New Year is a busy time with more people seeking advice on issues arising from the breakdown of their relationship. It may be that a couple has decided to remain together for one last Christmas for the sake of the children, only to find that the plan hasn’t worked out. Or it may be an individual who, having separated from their partner some time previously, wants to deal with matters in the New Year, as part of a resolution to get their affairs in order. There is never an ideal time to broach the subject of separating from your partner, but if you have called an end to your relationship, there are a number of things that you can do in preparation for your first appointment with a solicitor. Firstly, gather together your bank statements and credit card bills, obtain an up to date mortgage redemption statement and ask an estate agent to assess the value of your house. On a practical note, you should obtain details of your eligibility for tax credits and child benefit. The Child Maintenance Service has a helpful online assessment tool to help you work out how much you will receive or pay for your children. This information will give you an idea of the income you are likely to have from all sources and then you can work out your budget going forward. Then you could consider whether you want to attempt mediation in trying to work out arrangements for the children or to settle finances. Mediation is a sensible way to try and resolve these issues without resorting to the court. The above will stand you in better stead when you first see your lawyer and will enable your lawyer to progress your case more quickly.

MADELINE RAND King Davies & Partners

Deadline date for the February issue is: SATURDAY 15TH JANUARY

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