What is a lasting power of attorney (LPA)?
A lasting power of attorney is a legal document that allows you to appoint one or more people to make decisions on your behalf during your lifetime. The people you appoint to manage your affairs are called the attorneys. A lasting power of attorney is a completely separate legal document to your will although many people put them in place at the same time as getting their will written, as part of planning for the future.
There might come a time when you’re no longer able to make or communicate your own decisions. Having a lasting power of attorney set up can make things much easier if and when that time comes – so it’s worth considering now.
There are a number of reasons why you may need someone to make decisions on your behalf. It may be a temporary measure, if you’re going into hospital and need help with everyday financial tasks like paying your bills. Or it may be part of long-term planning – if, for example, you’ve been diagnosed with dementia and want to plan ahead in case you lose mental capacity to make your own decisions in the future.
What are the different types of Lasting Power of Attorney (LPA)?
There are two types of LPA:
- making financial decisions
- making health and welfare decisions
What can happen if there is no LPA set up
It is often assumed that a spouse would automatically be entitled to manage assets on behalf of their incapacitated spouse but that is not the case. In the event of someone losing the ability to manage their own financial affairs, their assets become frozen and an application would be required to the Court of Protection for permission for somebody else to manage their affairs.
This also applies where assets are jointly owned, and in the event of one of the co-owners losing mental capacity, the other co-owner would be required to make an application to the Court of Protection in order to deal with those assets (i.e. to sell the house).
This process is time consuming, expensive and burdensome and requires the payment of ongoing fees. It could also result in someone you may not have chosen managing your financial affairs.
Rather like a will, you need to have full mental capacity to draw up a lasting power of attorney, and as such cannot make one when it is really needed. Like your will, an LPA can be updated or cancelled at any time should your circumstances change.
LPA for property and financial affairs decisions
If you create this type of LPA, your attorney can make decisions about things like:
- selling your home
- dealing with your savings and investments
- paying your mortgage and bills
- arranging repairs to your home
LPA for health and welfare decisions
If you create this type of LPA, your attorney can make decisions about things like:
- where you should live and who you should live with
- your medical treatment
- the care and support you receive
- who you have contact with
- what kind of social activities you take part in
For further information
Please contact us if you require any further information or would like to arrange a consultation to discuss making a Lasting Power of Attorney.