Plan ahead with a Lasting Power of Attorney

What is an LPA?

In simple terms, an LPA is a legal document which designates someone or someones to make decisions for you. The ‘attorney’ could be your partner or spouse, your child or children, your close friend, your relative, the only requirement is that they’ve known you for at least 2 years.

They can either be required to make decisions together, known as jointly or on their own, known as jointly or severally, or jointly on some decisions but severally on others. This last option is the preferred choice, and you (the donor) can specify which decisions attorneys must agree on; such as a house sale, and leave day to day decisions to made by attorneys on their own; such as withdrawing money to pay for care.

It is also sensible to add replacement attorneys who can step in if the original attorneys are unable or unwilling to act on your behalf.

Once registered with the Office of Public Guardian, an LPA cannot be amended. If you’d like to make a change, such as appoint new attorney’s, then you’d need to register a new LPA. So it is important to make sure all details are correct.

There are two types of LPA covering different areas of your life:

• Health and welfare – this includes decisions such as where you live, daily well-being, and ongoing health care including consenting or refusing to medical treatment
• Property and financial affairs – this includes decisions such as managing bank accounts, paying bills or selling property

There are some common misconceptions about whether or not an LPA is required, such as:

I’M MARRIED I DON’T NEED AN LPA

Don’t assume that your spouse will automatically be able to deal with your bank account and pensions, and make decisions about your healthcare if you lose the ability to do so, this is not the case, without an LPA, they won’t have the authority.

I’M TOO YOUNG FOR AN LPA

None of us knows when something which may happen to us, so it’s a good idea to get it set up well before you need it. It’s much harder and more expensive for someone to help you with your money and property if you’ve already lost mental capacity.

My next of kin or common-law spouse will make these decisions for you

Many people believe that your ‘next of kin’ or ‘common law’ spouse can make decisions on your behalf if you’re taken ill however the only people who can make decisions on your behalf are those who have been authorised to do so via an LPA.

We have a joint account

If one of the account holders has diminished capacity, the bank can shut down accounts and freeze assets. And legally any money in that account does not belong to the other account holder.

Registering a Lasting Power of Attorney is especially important for business owners

Without one, you wouldn’t be able to make financial decisions which affect your business. It would no longer be possible to access bank accounts which require your signature, nor would your business partners be able to access joint accounts. Legislation also means that a company director automatically ceases to be a director if they lose their mental capacity. This could cause several problems such as not being able to pay creditors, or your customers may not be able to access your product or service. If your family relies on your business for your income, they could be left without access to those funds.

What happens if I don’t have an LPA?

• If you do not have an LPA, an application has to be made to the Court of Protection for a Deputyship Order
• This process can take 9-12 months during which time your accounts (including joint accounts) are frozen, which means bills cannot be paid
• The process can cost up to £3000, and your loved ones will have to use their own funds to make the application
• A judge makes the final decision on who is appointed to deal with your affairs. This may not be a friend or member of your family; it could be a solicitor, court official or local authority
• Every time a decision is to be made about your welfare, your relatives will have to go through this official