Making a Lasting Power of Attorney (LPA) is a crucial part of planning for the future, but people often put it off. We look at why it is always recommended to have an LPA in place, and the problems you could face if you delay.
An LPA is a legal document giving your attorney the authority to make decisions on your behalf, should you be unable to do so for yourself. You can choose who you want to be your attorney, and people often select close family members, such as a spouse, son or daughter.
There are two types of LPA, as follows:
- A property and financial affairs LPA; and
- A health and welfare LPA
If you were to lose mental capacity in the future, your attorney would be able to manage your affairs for you.
A property and financial affairs LPA could allow them to pay your bills, insure your home, collect your benefits and manage your investments.
A health and welfare LPA could allow them to choose where you live, decide what your daily routine will look like and permit or refuse medical treatment on your behalf.
If you do not have an LPA, there are several risks.
No-one can help you if you cannot make your own decisions
Should you become unable to manage your own affairs, it will generally be too late to make an LPA at this point. This means that your family will not have the legal authority to make decisions for you, which could leave you in limbo.
It can be extremely challenging for those wishing to assist you if they are not able to pay bills on your behalf or make arrangements to protect you, your property and your investments.
By putting LPAs in place while you have mental capacity, you will have the peace of mind of knowing that your attorneys will be able to step in if they are ever needed. It will also give you the chance to choose your own attorneys. This should be both people whom you trust implicitly and who you know will have the time and ability to take on the role.
Your loved ones would have to make a lengthy court application
If someone loses the ability to manage their own affairs and does not have an LPA in place, their family members would need to apply to the Court of Protection for a deputyship order if they wanted legal authority to represent you.
Problems can arise while your family waits for the required authority
Applying for a deputyship order is a considerably longer process than making and registering an LPA, and is also more expensive. While the application is processed, which will take several months, no-one will be able to access the patient’s funds to pay their bills or make arrangements for their care.
A deputyship order is more expensive and more challenging
As well as a higher cost in dealing with the application, a deputyship order requires the payment of an annual fee and the deputy will be subject to supervision by the Court of Protection.
Where the deputyship order gives authority relating to financial matters, the deputy will need to take out a security bond. This is an insurance policy that provides cover to protect the patient’s money.
Putting an LPA in place
If you make an LPA now, it can be registered with the Office of the Public Guardian so that it is ready to use, should this ever be necessary. This can avoid difficulties for you and your family in the future, and ensure that your affairs can be dealt with seamlessly.
You will also be able to decide exactly what authority you want to give, and tailor your LPAs accordingly. For example, if you have more than one attorney, you can decide whether you want them to make all decisions jointly, or whether you are happy for minor, day-to-day decisions to be made by a single attorney.
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If you would like to speak to one of our expert estate planners, ring us on 01634 353 658 or email us at rob@pembrokewillwriters.com.