What financial steps should you take after a serious diagnosis?

01 The documents that expire with capacity

A lasting power of attorney can only be made while you have capacity to make it, and registration takes weeks after that. Both types — property and financial affairs, and health and welfare — matter, and the second is the one households most often skip.

Without them, the alternative is a Court of Protection deputyship: months of delay, considerably more cost, ongoing supervision, and no family say in who is appointed. That comparison is the whole argument for doing it in the first week.

A will is in the same category. It requires testamentary capacity, and an out-of-date one is a live problem rather than a dormant one — particularly after a marriage, which revokes a will in England and Wales.

Take copies. An LPA is only useful if the attorney can produce it, and institutions frequently want to see the registered document rather than a photocopy. The Office of the Public Guardian issues certified copies, and getting them at the point of registration saves a delay later at a worse moment.

On the defaults above, the worked example shows £564. Against roughly £1,200 and several months for a deputyship, plus annual supervision and no family say in who is appointed.

Source: Lasting power of attorney

02 The forms that direct money

An expression of wish tells pension trustees who should receive the fund and in what form. It is not binding and it is what they act on, and it is frequently years out of date. Every pension needs one, including old workplace pots.

Life policies should be checked for whether they are written in trust. A policy in trust pays the trustees within weeks and outside the estate; one that is not can lose 40% to Inheritance Tax and wait for probate.

Death-in-service cover through an employer is a third document with its own nomination, and it is the one most often forgotten because it never generates a statement.

Source: Tax on your private pension contributions

03 What a diagnosis makes available

Personal Independence Payment and Attendance Allowance are not means tested and are assessed on the help you need rather than on a diagnosis. Employment and Support Allowance covers the work capability route where work is no longer possible.

Employer cover is frequently more valuable than any of them: group income protection often pays until the scheme retirement age, and critical illness cover pays a lump sum. Both have claim conditions and time limits, and both are easy to overlook.

Where the prognosis is under twelve months, a serious ill-health lump sum may be available from a pension — a decision worth taking deliberately rather than reflexively, because it moves money into the estate.

Check the timing conditions on any insurance claim carefully. Critical illness policies commonly require survival for a defined period after diagnosis, and income protection policies have deferred periods before payment starts — both of which mean a claim should be notified early even where nothing is payable yet.

Source: Personal Independence Payment

04 Why investment decisions come last

Almost nothing about a portfolio needs to change urgently. Selling to cash after bad news locks in whatever the market has done and removes the growth the household may still need for decades, particularly where a partner will survive a long time.

The exceptions are specific: an annuity purchase where enhanced rates would now apply, and any pension transfer under consideration, both of which are affected by health and should be reconsidered rather than continued.

Everything else can wait until the paperwork is done and the immediate situation is clearer. A decision made in the first fortnight is made with the least information anyone will ever have.

Source: FCA consumer information

05 The list somebody will need

Write down where everything is: banks, pensions, investments, policies, the solicitor, the accountant, the passwords held somewhere secure. That document is what a partner or an attorney actually needs, and no institution provides it.

Include what is not obvious — a pension from a job in the eighties, a policy taken out through a former employer, a premium bond holding nobody mentions. Those are the assets that go missing.

Then tell someone it exists and where it is. A perfect list nobody knows about is the same as no list at all.

Keep the list somewhere a partner can reach without a password you have not shared. A sealed envelope with a solicitor, or a copy given to the person named as attorney, both work. What does not work is a file on a laptop nobody else can open.

Source: Find pension contact details