Lasting power of attorney
It is difficult but very important for you to consider what would happen if you lost your faculties which can happen in many circumstances such as after a stroke, serious illness or accident and commonly dementia.
If you cannot make decisions for yourself, you will need help managing your financial affairs but if you wish to chose who will help you, then you must do so formally before you lose your faculties.
A Lasting Power of Attorney (LPA) is a formal legal document in which you (the ‘donor’) nominates one or more trusted persons known as ‘attorneys’ to help you make decisions or make decisions on you behalf in order to look after you affairs if you lose capacity. You can also appoint a substitute attorney in case the main person(s) you chose are unwilling or unable to act at the time you lose capacity.
An attorney can be anyone aged 18 or over, for example:
- husband, wife or partner;
- a relative;
- a friend;
- a professional attorney (such as a solicitor).
In choosing the right person we would also suggest that you consider the following:
- does the person look after their own finances well?
- how well you know them & can you trust them to make financial decision on
- are they happy to accept the responsibility?
- are they of a suitable age?
Many people mistakenly believe their relatives will simply be able to contact the bank to withdraw their money or other organistations to deal with their finances but this is simply not the case.
If there is no valid Power of Attorney in place before you lose capacity then your loved ones will have to apply to the court to get formal legal authorisation to help you which is a long and often costly process.
Answers to frequently asked questions:
- Do not worry about suddenly losing control of your finances of you make an LPA. With a Financial and Property Affairs LPA you can choose whether it should take effect immediately or only when you lose mental capacity.
- A Health and Welfare LPA only comes into play after you lose capacity.
- Your attorney is only permitted to make a choice if you are unable to make that decision at the time it needs to be made. There are guidelines for your attorney to follow.
- Stay in control of your money. Rather than losing control of your finances, having an LPA in place puts you firmly in control of your affairs. You decide exactly how much authority your chosen attorney can have and you can if you wish provide detailed guidelines and restrictions on what they can do.
There are two types of LPA’s and whilst we would recommend that you consider making both to offer maximum protection you do not have to. You may think one is more important than the other. The two types of LPA are:-
- Financial and Property Affairs; and
- Health and Welfare.
Property and Financial Affairs LPA
This LPA typically authorises your chosen attorney to pay your bills, deal with your bank accounts (and other investments) and buy and sell property for you. This type of LPA can even be used whilst you still have capacity if you wish.
Health and Welfare LPA
You can only use this type of LPA when you have lost capacity and are unable to make decisions for yourself. It gives your trusted attorney the authority to make decisions about where you should live and what medical treatment you should receive.
To be valid an LPA needs to be registered with Office of Public Guardian which costs £110 but in some circumstances there can be a reduction in this fee if you are on a limited income.
Freeman Jones can help you with your LPA’s for a fixed fee and are happy to offer you a free initial appointment to discuss your requirements and answer any further questions you may have.