It may be uncomfortable to think about what might happen if you or a loved one lost their physical or mental faculties. Whether it’s a stroke, a serious accident, dementia or simply old age, putting a Lasting Power of Attorney (LPA) in place could mean that important arrangements exist so that the right healthcare and financial help can be provided when they’re needed most.
What is a Lasting Power of Attorney?
An LPA is a legal document through which you, the "donor", appoint an individual to act as your legal representative. If you become incapacitated as a result of a physical and/or mental health issue that makes you unable to communicate your own wishes, your attorney is then granted the power to act on your behalf in health and social care matters, or in your financial affairs.
While the powers of the LPA have to be triggered by appropriate circumstances such as a substantial cognitive decline, it is advisable for the document itself to be arranged well in advance, ideally while you are enjoying full physical and mental health. Here are some of the explanations and reasons why everyone should consider having a Lasting Power of Attorney:
Lasting vs Ordinary Power of Attorney
According to English Law, there are two types of Power of Attorney:
- An Ordinary Power of Attorney is made in good health but will be revoked if the donor becomes mentally incapacitated.
- A Lasting Power Of Attorney endures. In fact, its powers are typically only triggered at the point of incapacity, which is when it is needed.
Fast and convenient access
While the Court of Protection is there to make sure your family gets access to your finances in case you can no longer make decisions for yourself, this can take a long time if there is no LPA in place. With an LPA, the process is much more straightforward, meaning your family will be properly looked after without delay or any undue financial hardship.
You are in full control
To set up an LPA, you are in control of who will act as your attorney when the time comes. If you became incapacitated without an LPA, by contrast, it would be up to the Court of Protection to award decision making responsibilities for you to whoever they deem suitable. This might be a family member you don’t like or trust to act in your best interests.
Your LPA choices
There are two types of LPA: Personal Welfare and Property & Affairs. You can state limitations, so that if you only want help with your finances, this can be recorded in the LPA. However, bear in mind that once you are mentally incapacitated, you won’t be able to amend any limitations. What’s more, you can name one or several attorneys (as well as their successors) who can make decisions together or separately.
LPA must be registered
An LPA only becomes active once it has been registered. A Property & Affairs LPA can be triggered while you still have some mental faculties, meaning that your attorney is there to help you out. A Personal Welfare LPA, on the other hand, will come into force solely at the point when you can no longer make decisions for yourself.
Limited financial powers
Even with an LPA, it is not the case that your attorney has full authority over all your assets. Financial gifts are capped, meaning a court order will be required for the attorney to be able to make sizeable gifts of your money. Also, as regards investment decisions with your money, your attorney will need to seek professional financial advice first – an added protection for you.
Protection from your attorney
For added peace of mind, the Court of Protection has the ultimate say regarding any LPA. If there is a suspicion of foul play, or abuse of power by your attorney, or any inkling that your attorney may not be acting in your best interest, the LPA can be revoked and the Office of Public Guardian involved for your safety.
Ultimate peace of mind
If you own property, have cash savings or other assets, and have a partner and/or dependants, you will no doubt have made a Will. But what if something serious happens to you that doesn’t kill you but leaves you unable to provide for your family, nor able to communicate your wishes to your loved ones? That’s where an LPA is the single best way to make sure everyone is protected in the best way possible.
This article was contributed by George Ide Solicitors
DISCLAIMER: This article should not be regarded as constituting legal advice in relation to particular circumstances, and is merely a general comment on the relevant topic. If specific advice is required in connection with any of the matters covered in this article, please speak to George Ide Solicitors directly.
Published on 30th May 2018
(Last updated 26th June 2018)