What is an LPA and why do you need one?
What is an LPA?
With an LPA you are able to appoint one or more people to become ‘attorney’s’ to make decisions on your behalf. This will allow more control over what happens to you in the unfortunate event that you are incapable of making decisions yourself. This is different from an Executor who is in charge of fulfilling the wishes retained in your will in the event of you passing away.
An attorney in this instance is someone trustworthy that you appoint in order to make decisions on your behalf should you lack the mental ability to do so in the future. It is actually a misconception that the power of attorney will automatically pass to your next of kin, therefore it is extremely important to appoint your chosen people in advance of any decline in health.
Despite the incredible importance of appointing an LPA, only 1% of people in the UK have an LPA (according to The Times).
Why should I get an LPA?
An LPA gives you peace of mind and allows you to plan for your future no matter what happens to your health. It allows you to protect yourself and your family financially, whilst also avoiding family conflict by making your wishes clear whilst you are of sound mind to do so. To appoint an LPA you must be over the age of 18, of sound mind and choose the type of LPA you would like to appoint, as well as paying the required fee, details of which can be found here: https://www.gov.uk/power-of-attorney.
What types of LPA are there?
There are two types of LPA’s; one which covers health and welfare and the other which covers any property or financial affairs.
A health and welfare LPA would be appointed to make decisions regarding your daily health (i.e. self-care such as washing and dressing), medical care, in the event you may need to move to a care home and the administration of life-sustaining treatments or the decision to implement them. This kind of LPA can only be used when you are unable to make decisions for yourself.
You can choose an LPA for property and financial affairs in order to give the attorney power to make decisions about things such as managing bank accounts, paying bills, collecting benefits or pension payments or selling your home. This kind of LPA can be used as soon as it is registered with your permission.
You can also set up an LPA for any businesses you own, these will be separate from your personal finance and property LPA.
You can choose different Attorneys for the different types of LPA.
What happens if I don’t have an LPA in place?
If you unfortunately become unable to make your own sound decisions and you have no LPA in place, then you will no longer be able to decide who makes decisions for you. You will be unable to appoint an LPA at this point as you can only make your LPA while you still have mental capacity.
This means that people you don’t know could end up making crucial decisions about your health or your finances. It could also mean that your family and friends have to go to great lengths in order to make decisions for you, such as going to court, which could be a costly and time consuming process.
If your family or friends do have to go to court, they will be doing so for a deputyship order. There are two types of deputyship order, one which is for property and financial matters and the other for personal welfare (such as medication and treatment decisions).
The court will have the power to appoint anyone over the age of 18 to be a deputy and so it could very well end up being someone who does not know you well enough to know what your wishes would be. The court will also advise what actions can and cannot be undertaken by the deputy and could also appoint a third party such as a solicitor to undertake some of the decision making on your behalf. There are also fees associated with being a deputy and therefore it can be costly, unlike the one off fee to register an LPA.
The security of your future is not something which should be delayed. LPAs have often been associated with later life planning, but setting up your Lasting Power of Attorney is the best way of protecting yourself and your family in case of deteriorating mental or physical capacity, whatever your age.
Our next webinar in September is around “Preparing for Long Term Care” where the subject of LPA’s will be discussed in detail so please keep an eye on our *Resources- Webinar” section or sign up to our newsletter to make sure you don’t miss this one!
If you would like help in this area or have questions on the subject of LPA then please do not hesitate to contact us at Clarus Wealth and we will be happy to assist you.
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