What is a Lasting Power of Attorney (LPA)?
An LPA covers decisions about your financial affairs, or your health and care. It comes in effect if you lose mental capacity, or if you no longer want to make decisions for yourself.
You would set up an LPA if you want to make sure you’re covered in the future.
There are two types of LPA:
- LPA for financial decisions
- LPA for health and care decisions.
An LPA for financial decisions can be used while you still have the mental capacity or you can state that you only want it to come into force if you lose capacity.
An LPA for financial decisions can cover things such as:
- Buying and selling property
- Paying the mortgage
- Investing money
- Paying bills
- Arranging repairs to a property
An LPA for health and care decisions and can only be used once you have lost mental capacity. An attorney can generally make decisions about things such as:
- Where you should live
- Your medical care
- What you should eat
- Who you should have contact with
- What kind of social activities you should take part in
Unfortunately, many people diagnosed with dementia will eventually reach a point when they can no longer make decisions for themselves. When a person lacks ‘mental capacity’, it’s common for someone else, for instance, a family member, to make decisions on their behalf.
Who can make an LPA?
Anyone who is over the age of 18 and has the mental capacity to do so can make an LPA. Once a person has lost mental capacity, they will not be able to appoint an LPA.
Why would someone need an LPA?
For a person with a diagnosis of dementia, there may come a time when they are unable to make decisions about their care and their finances. A lasting power of attorney is a legal document appointing one, or more, trusted people to be their attorney(s). An attorney is a person responsible for making decisions on the person’s behalf.
People in a civil partnership or marriage might assume their partner can deal with their finances and make decisions about their healthcare should they lose the ability to do so, but this is not necessarily the case. If someone has not drawn up an LPA when they are assessed to have lost capacity, and their partner or friend wants to make decisions on their behalf, they may have to apply to the Court of Protection to be appointed as the person’s Deputy. This can be a long, complex and expensive process.
If you’re considering making an LPA, here are five reasons why it might be a good move for you and your family and friends.
You can choose people you trust to manage your affairs and to make decisions on your behalf, should you become unable to do so. You can choose who acts for you and how they make decisions.
A Lasting Power of Attorney is a legal document which authorises your specified people to make decisions on your behalf. If you provide your bank cards to trusted friends or relatives, any permission you have given to them will be automatically revoked if you lose capacity in which case, they are technically committing fraud.
It is important to note that you do not lose any control by making an LPA. Indeed, a properly drafted LPA can contain details of your wishes and instructions for your Attorneys to follow, allowing you to retain control even after incapacity.
If you’re unable to make a decision for yourself in the future, the person you choose will be able to make decisions for you, rather than a stranger or someone you do not trust.
Making an LPA helps start conversations with your family about what you want to happen in the future.
Other ways an LPA is beneficial
An LPA isn’t just put in place due to mental illnesses, it’s also very important to have as security for anything sudden that can happen. “It will never happen to me”, is what a lot of us think. But sadly, accidents do happen all of a sudden and out of the blue. And in a heartbeat, lives can be turned upside down.
In the UK, every 90 seconds someone is admitted into hospital with a brain injury, whether it be from an accident or contact sport being examples of what can go wrong.
If such a life situation was to happen and an LPA wasn’t a document you have, then family or friends wouldn’t be able to assist or take control of finances or welfare decisions. You would have to apply to the Court of Protection to grant you permission which is a costly and lengthy process.
To apply to become a deputy there’s a fee of £365 that you are required to send with your application. If the court decides that your case needs a hearing then there’s an additional charge of £485. These payments are only the start of charges that will be occurred should you need to apply to the Court of Protection.
Having an LPA not only eliminates occurring the charges and the stress, but it also comes into place instantly. Once the LPA is submitted, it takes up to ten weeks to register. The power will be effective as soon as the LPA is registered, so the attorney will be able to start making decisions straight away unless they specify otherwise on the application. When applying to the Court of Protection, the court aim to issue an order within 21 weeks of the application being stamped. It can take 5-6 weeks to get to this point, depending upon how long the initial steps take. Please note, an LPA must be put in place BEFORE the person loses their mental capacity.
You probably wouldn’t want to die without a will in place, especially if you own property, have substantial cash savings, or have a partner or dependants. But what if something happens to you that does not kill you, but leaves you incapable of communicating your wishes to those closest to you.
It’s an uncomfortable thought but it’s crucial to consider it in good health and make the sensible decision. An LPA is probably the single best way to make sure that your interests are protected from the moment you are incapacitated until your death, after which your will can distribute your estate in the usual way.