Key Later Life Finance said this could put customer outcomes at risk and advisers could risk regulatory issues if wills and LPAs are not in place.
The firm said this was especially true if it was a lifetime mortgage and if there was a drawdown facility that was needed for income and/or meeting the costs of a care home.
Key Later Life Finance added that customers without LPAs risk leaving their families with lengthy and expensive Court of Protection action so they can secure control over finances.
The estates of customers without wills are decided by intestacy laws and they will not be able to decide who benefits from the estate. This includes those with a property that has a later life mortgage secured against it.
Key Estate Planning is urging mainstream and equity release advisers to focus on wills and LPAs as part of the process of dealing with older customers and, where necessary, include medical professionals to assess mental capacity to protect the customer and adviser.
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Andrew Parkinson, director of Key Estate Planning, said: “LPAs and wills are critical not just for general peace of mind, but specifically for protecting customers’ ability to manage their options in terms of any later life lending product they may hold.
“Should a customer lose mental capacity, no one, including family, can make financial decisions about the mortgage or property without an LPA. Without a will, an estate will be tied up in a legal process. Having one in place helps families manage all financial affairs smoothly and cuts unnecessary costs.”
He continued: “Modern families are often blended. A will ensures children from previous relationships are protected, as are vulnerable dependants and anyone else that customers specifically want to benefit.
“We see estate planning as an essential part of later life financial planning – one that complements financial advice and helps clients achieve lasting peace of mind and advisers to meet Consumer Duty obligations while offering holistic support that reduces the risk of future disputes and safeguards family wealth and peace of mind.”
