Lasting Powers of Attorney (‘LPAs’) – you may have heard of them, you may not; what are they and do you need one?
If you have ever tried to deal with a bank, insurance company, even internet provider on someone else’s behalf you will know how difficult it is nowadays to get anything done. Financial security is a hot topic – we all want to know our personal information (and our money) is safe. However, if you are trying to help a friend or relative who is not able to deal with their affairs, more often than not you will hit a brick wall.
What Are LPAs?
LPAs are a way of you making a choice, deciding who you want to deal with your affairs if you are unable to do so yourself. There are two types: Financial Decisions (‘Finance’); and Health and Care Decisions (‘Health’). They pretty much do what they say on the tin:
A Finance LPA allows a person of your choosing to deal with all aspects of your finances as well as any assets you own, including your house.
A Health LPA allows a person of your choosing to deal with all aspects of your medical and social care, your housing needs and anything relating to your personal welfare.
When can LPAs be Used?
Before they can be used, both types of LPA need to be registered at the Office of the Public Guardian (part of the Court system).
Once registered, Finance LPAs can be used right away if you want to. This can be useful, for example: if you are going abroad for an extended holiday; or you don’t have internet access but would like to take advantage of online insurance offers. You tell you chosen attorney what you want doing and they do it.
Health LPAs are slightly different and can only be used if you have lost the ability to make decisions (mental capacity) regarding your health and welfare for yourself. This may be a temporary incapacity or it may be permanent. For the period of time when you are unable to make decisions, your chosen attorney will make the decisions for you, under a legal duty to always act in your best interests, not theirs.
Likewise, your chosen attorney under a Finance LPA will take over decision making in relation to your finances if you are no longer able to make those decisions for yourself. Again, they are under a legal duty to act in your best interests only.
What Happens if I Don’t Have LPAs and I Lose Mental Capacity?
In order to deal with your financial affairs and assets, your family (or a close friend) would need to make an application to the Court of Protection to be appointed as your Deputy. If no-one makes the application, the Local Authority may make the application and take over the decision making for you. Court of Protection applications take significantly longer and are more expensive than putting LPAs in place.
Who Should be my Attorney?
Most people choose family members or very close friends. You should only ever choose an attorney if you are certain that they are trustworthy and would only ever act in your best interests. If no-one fits the bill, you can appoint a professional, such as a Solicitor or Accountant, but professionals will charge for their services so bear this in mind when deciding.
Do I Need LPAs?
Life is unpredictable so in an ideal world all adults would put LPAs in place, however, there are certain groups of people for whom LPAs should be a priority:
- You own property with someone else – if anything happens to you, affecting your mental capacity, your co-owner can have difficulties dealing with the property;
- You have been diagnosed with a condition which may result in loss of mental capacity, eg. dementia;
- There is a history of dementia in the family;
- You have physical restrictions which make it more difficult to get to the bank or talk on the telephone;
- You are over 50 years old;
- You live alone;
- You have a history of stroke or other potentially debilitating illness;
- You have dealt with your own affairs for years and, frankly, life’s too short and you’d rather someone else took over.
If any of the above apply, it is worth making an appointment with your solicitor to talk over whether LPAs would be appropriate for you.
Contact Faye Evans, Solicitor, on 023 9282 0747 for help and advice.