It is not at all uncommon for clients to tell us that they have never heard of Lasting Powers of Attorney (‘LPAs’) or, if they have, that they don’t need one until they’re older. However, the importance of LPAs cannot be overestimated.
What is a Lasting Power of Attorney?
In short, it is an insurance policy which you put in place to ensure that, if you are unable to deal with your affairs yourself, someone who you know and trust and who you have chosen yourself will step in to look after your affairs.
This could be because you have lost mental capacity through an accident or illness or it could be because, for example, you are abroad or in hospital and there are practical reasons why you cannot deal with your affairs personally.
An LPA is a legal document by which you appoint someone else to be your ‘Attorney’ to deal with your affairs if you are unable to act yourself.
Do I Need An LPA?
LPAs are often associated with the elderly, however, LPAs are relevant to everyone. Why? Here are a few points to consider:
- While the risk of losing capacity may seem greater when you are older, incapacity can strike at any time, for example, as a result of a serious accident or sudden illness.
- Do you have joint accounts with your partner or another person? If you lose capacity, your bank may freeze these accounts without sight of a valid Lasting Power of Attorney. How would the co-account holder be able to pay the bills and other costs if these accounts could not be accessed?
- Do you have a business? What would happen if you were abroad or involved in an accident when an important action needed to be taken? LPAs can be used to appoint your business associates to deal with business matters; they are not only for your personal affairs.
- Do you live abroad or travel a lot? If so, it might be appropriate to appoint an Attorney to deal with your assets in this country, so that steps can be taken in your absence (with your consent).
- We live in an ageing society and, with the risk of developing mental illnesses such as dementia, it is important to consider what would happen to your affairs if you were to develop such a disease. It is less stressful and upsetting to make these decisions at a time when you are fit and well, rather than when the need of an LPA becomes urgent.
What Happens If I Don’t Have An LPA In Place And I Suddenly Need One?
If you have lost capacity, you cannot make an LPA. An application would need to be made by someone else (not necessarily the person you would choose) to be appointed to act as your ‘Deputy’ by the Court. This process is arguably more time consuming, costly and stressful for the parties involved at a time when you are in urgent need of care and support.
There are two types of Lasting Power of Attorney; the Property and Financial Affairs LPA and the Health and Welfare LPA.
For further information regarding Lasting Powers of Attorney and the process involved in making an LPA, please contact a member of our Tax, Trusts and Estates team: Email email@example.com or call 01483 302000 and ask to speak to Edward Pennington.