Creating a Lasting Power of Attorney (LPA) is commonly linked with the elderly population, but it can offer crucial safeguarding and assurance at any life phase.
An LPA grants authority to a trusted individual to make decisions on your behalf in situations where you are unable to do so. While the need for such arrangements may seem distant, considering potential scenarios, like illness or accidents, highlights its relevance across various life stages.
Failing to establish an LPA can present challenges for your loved ones in acting on your behalf. Therefore, regardless of your age, whether in your 20s or 80s, designating an attorney emerges as a valuable measure for ensuring protection in unforeseen circumstances.
Your next of kin cannot automatically make decisions on your behalf
Contrary to a common belief, your next of kin does not possess automatic decision-making authority on your behalf. This misconception extends to spouses or civil partners, who, without a Lasting Power of Attorney (LPA), lack the inherent right to make decisions for you.
In the absence of an LPA, the absence of a designated decision-maker may leave a void in health and financial management, creating complications during illness or incapacity. Joint assets, such as shared bank accounts, could face freezing until legal control is established through court proceedings, causing potential disruptions.
Failing to secure an LPA may necessitate your loved ones to seek a Deputyship Order from the Court of Protection, a time-consuming and potentially more expensive process compared to appointing an attorney. Furthermore, the Court of Protection may designate someone to act on your behalf, a choice you may not have made yourself.
A Lasting Power of Attorney can be used to cover health and financial affairs
A Lasting Power of Attorney serves the dual purpose of addressing both health and financial matters.
There are two distinct types of LPAs, each catering to specific aspects of your life. It is advisable to have both in place, allowing you to designate the same trusted individual(s) to act on your behalf for both health and financial decisions.
A health and welfare LPA empowers a chosen individual to make decisions regarding daily routine, medical treatment, or potential relocation to a care facility. On the other hand, a property and financial affairs LPA covers aspects such as managing your bank accounts, handling assets, and facilitating property transactions.
While commonly associated with long-term illnesses in old age, LPAs are versatile tools that can also be employed for temporary decision-making. For instance, in the event of an accident, your appointed attorney can manage your affairs during your treatment, ensuring a seamless transition until you are fit to resume responsibility.
Additionally, the flexibility of naming more than one attorney allows you to specify whether they should jointly make decisions or have the authority to act independently.
Choosing the right person to serve as your attorney is a significant decision, involving considerations of trust and willingness to act in your best interests.
Engaging in a conversation with your loved ones about the responsibilities associated with being an attorney and communicating your wishes can be invaluable. This discussion not only provides peace of mind for you but also offers guidance to your potential attorney in the event of your loss of mental capacity.
In instances where family or friends may not be suitable for the role, opting for a professional attorney, such as a solicitor, is a viable alternative.
It is crucial to note that once mental capacity is lost, the registration of an LPA becomes impossible. If this is a task you’ve been delaying, prioritizing it becomes essential to ensure the proper execution of your preferences and safeguarding your interests.
You must register a Lasting Power of Attorney with the Office of Public Guardian
You can download the necessary forms, along with an information pack, from the Office of Public Guardian, or use the online service to start the process of naming an LPA.
Read the forms carefully. A mistake could mean your LPA is rejected and you’ll need to pay a fee to reapply.
Sign the forms with your chosen attorney, and have a “certificate provider” confirm your understanding without pressure. Eligible providers include individuals known to you for at least two years or professionals like solicitors or doctors; family members or partners cannot serve as certificate providers.
After completing the forms, register the LPA with the Office of the Public Guardian, a process taking several weeks.
The registration fee is £82 for one LPA, and if registering both financial and health LPAs, the cost is £164.
While not mandatory, engaging a solicitor can expedite the process, especially in complex affairs.
Setting up a Lasting Power of Attorney is just one way to improve your security
An LPA could protect you if you ever become too ill or injured to make decisions for yourself, but it’s just one step you can take to create security in case the unexpected happens. Depending on your life and concerns, you might want to consider taking out income protection, creating a care fund, or building a financial safety net.
A tailored financial plan could help you assess which steps could provide you with peace of mind. Here at Jordan FM, we want to help, please contact us to arrange a meeting.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
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