Monday, 09 September 2019

Lasting Power of Attorney – What is it and Why is it So Important?

As you age, giving a family member or close friend a lasting power of attorney (LPA) is imperative. Despite the fact that the thought of becoming mentally incapacitated probably isn’t something that you’d like to dwell on, you need to make an LPA while you are still able to make these important decisions for yourself.

Below, we discuss the reasons why assigning an LPA is such a necessary action to take, what it means for you, and how to go about it.

What is a Lasting Power of Attorney (LPA)?

A lasting LPA is a legal document that allows you to nominate someone – known as an ‘attorney’ (it is possible to appoint more than one) to look after your affairs. This attorney is someone whom you trust to make decisions on your behalf in any instance that you are not able to make them yourself.

There are two types of LPA in England and Wales – one which allows your nominated attorney to make decisions regarding your health and care (including in terms of setting up assistance home care), and one which allows them to make financial property-related decisions.

In Scotland, there is a third option a Combined POA which integrates both the personal welfare and continuing powers of attorney, with the latter regarding your financials. Northern Ireland only offers one type of LPA – enduring power of attorney – which covers property and finances.

It costs no more than £82 for each specific power of attorney application, depending on where you live in the UK. If you choose to cover both property and affairs and health and welfare POA, you would need to pay £164. If you use an advisor or solicitor to draw up your application/s, these costs will be over and above the application fee.

Why You Need an LPA

It would be wrong to assume that, should you lose the ability to make decisions for yourself, your spouse or next of kin will automatically be granted the power to take over on your behalf.

The reality is, that if you become mentally incapacitated and you do not have an LPA, your next of kin will need to wait for a court order before they can go ahead and make even basic decisions regarding your care and personal affairs. The Court of Protection will sometimes insist on a hearing before making a final decision and will require that the chosen ‘deputy’ keeps a record of all transactions and decisions that they make. This record will need to be submitted for review on an annual basis. The entire process will cost £985 upfront and £320 per year is payable thereafter.

How to Create an LPA

In England and Wales, you can opt to apply for an LPA online via the gov.uk website. From there, you can complete the forms in full and submit your application. You are entitled to enlist the services of a solicitor if you so wish, but this is not required.

Remember to discuss the LPA with your prospective ‘attorneys’ before including them in your LPA to ensure that they are aware of, and prepared for, the responsibility that they will be taking on. It is also imperative to state when you would like the LPA to take effect – immediately upon registration or only in the event that you lose mental capacity.  

It is never too early to create and register your LPA. Plan ahead, and you can rest easy knowing that you will be reducing the future financial stress on your loved ones and that your financial wellbeing and health will be taken care of by the person, or people, whom you trust the most.  

*Fees correct at time of publication

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