A Lasting Power of Attorney is a deed in which you can appoint someone you trust to make decisions on your behalf, if you are unable to do so yourself. The person that gives instruction to set up a Lasting Power of Attorney is known as the donor, and the person appointed by the donor is known as an attorney.
There are two different types of Lasting Powers of Attorney (LPA), a Property & Financial Affairs LPA or a Health and Welfare LPA.
A Property & Financial Affairs LPA gives your attorney(s) authority to make decisions relating to your finances including bank and building society accounts, stocks and shares, ISAs, utilities, any property and transactions, as well as pensions and benefits.
A Health & Welfare LPA grants your attorney(s) the ability to make decisions in relation to your health, medical treatment, daily routine, where you live, and general welfare. This LPA can only be used when you have lost mental capacity to make your own decisions.
Who should set up a Lasting Power of Attorney?
There is no right time to set up an LPA as everyone has their own unique circumstances. Having LPAs in place before you need them gives you the added reassurance that your affairs will be managed by the people that you have appointed and that you trust.
Many associate setting up a Lasting Power of Attorney with ageing, immobility and increasing concern for illness or loss of mental capacity. However, there are many reasons that anyone of any age might appoint an attorney.
Illness or Injury
Unfortunately there is no age restriction on being affected by illness or injury. Should anything happen which means you are too sick to take care of yourself or your finances, LPAs allow someone you trust to assist you and make decisions with you.
Extreme sports attract a much younger demographic, and come with high risk. Accidents can, and do, happen. If a situation leaves you stuck in hospital or confined to your home, having LPAs already in place allows your attorney(s) to take care of you and your financial affairs.
Travelling
If you are travelling abroad for a long period of time, it might be necessary to appoint an attorney. A Property and Financial Affairs LPA would allow your attorney to take care of decisions which require you to be physically present. Helping you, for example, keep in contact with your bank, health and travel insurance provider, or phone company. This would be a General Power of Attorney.
Life changing events
Having LPAs in place is as important as having a Will, and reviewing them following any important milestones is always advisable.
When buying new property, this is likely to become your most valuable asset. You need to make sure you’re prepared if you lose capacity, or become uncontactable due to travel or unforeseen circumstances. A Property & Financial Affairs LPA means someone you trust will be able to make arrangements relating to your property on your behalf.
If you’re getting married you may wish to appoint your spouse/civil partner as your attorney. It is a common misconception that your spouse/civil partner will automatically be able to take care of your finances. People who hold a joint account with someone who loses capacity often have the misunderstanding that they can continue to access the account as before. Unfortunately, if a person loses capacity, the authority to access the account is void and the British Banking Association have every legal right to freeze the account until a registered
LPA or court protection order has been declared. If an LPA has not been set up prior to the loss of capacity, then a family member will need to apply to the Court of Protection to become a Deputy. The process of gaining this is time-consuming and costly, and can also add to upset at possibly an already distressing time.
Having a child means you’re responsible for more than just yourself. It’s important to have LPAs in place so that family and loved ones can make decisions quickly and without expense.
If you own a business, depending how your business is set up, it could be worth considering an LPA. This could assist with succession planning and making decisions to limit disruption as much as possible in your absence.
For peace of mind
A Lasting Power of Attorney can only be put in place whilst you have the mental capacity to do so. Therefore it needs to be created before your health deteriorates.
Leaving it too late means you will be unable to appoint those you trust to be your attorneys, and risks leaving your loved ones with a long and expensive court process.