Lasting Powers of Attorney – why you might need one
Any of us could have an accident, an age-related illness or a mental or physical condition at any point in our lives. Such situations can strike anyone at any time, and often without warning, resulting in the person affected losing the ability to manage their own affairs.
Making a Lasting Power of Attorney (LPA) while you are still fit and healthy can ease the burden on your family – and you – by giving them the authority to act on your behalf if you were to find yourself mentally or physically incapacitated.
There are two types of LPA: a “Property & Financial Affairs” LPA which allows someone else (the “Attorney”) to make decisions about money matters, such as paying bills and running bank accounts; and a “Health & Welfare” LPA which nominates someone to make decisions about your healthcare, living arrangements and also expresses your wishes about life-sustaining treatment.
Appointing a Power of Attorney is a very important role, and you should look to appoint someone that you have absolute trust in, and that you can be sure will act in your best interests at all times; as such individuals will be able to make the same decisions on your behalf, as you are able to do yourself.
The key difference between the two types of LPA is that a “Property & Financial Affairs” LPA can be used whilst the donor still has capacity, should they wish this to be the case, whereas the “Health & Welfare” LPA can only be used once the donor has lost capacity.
A costly alternative
If you do not have an LPA in place and later become mentally incapacitated, someone will have to make an application to the Court of Protection to become your Deputy before they can access and take control of your finances. Making such an application to the Court is far more complicated, costly and stressful than setting up an LPA. What is more, the Court will impose various on-going costs and duties imposed on the Deputy after granting a Deputyship Order.
It may be necessary to pay an annual supervision fee to the Court of Protection. The Deputy may have to take out a security bond to cover their actions as a Deputy, and every year they will have to provide a Deputyship Report to the Court.
By establishing an LPA , you will avoid these complications in the future if the worst should happen, and it will give you and your family the peace of mind of knowing that you have done all you can to ease the burden on others. You can then get on with your life with the hope that your attorney will never have to use it.
Your preferred Solicitor or Legal Adviser will be able to provide advice and assistance with regards to establishing an LPA.
The Financial Conduct Authority does not regulate Last Testament and Will writing or LPAs. Past performance is not a reliable indicator of future performance. The value of your investment can go down as well as up and you may not get back the full amount you invested.