A Lasting Power of Attorney, (LPA), is a legal document with which you can nominate somebody to look after your finances and welfare should you ever lose mental capacity following an accident or as a result of a debilitating illness such as dementia.
Here are 5 things that you should know about the Lasting Powers of Attorney, (LPAs).
1 – Everyone should have an LPA
You can never know what the future holds and so the best way to ensure that your finances are in order is to set up an LPA with a trusted solicitor, family member, or friend appointed as your attorney. If you do not have an LPA in place when you lose mental capacity, your financial and welfare decision may be made by Social Services or your local authority without consulting your family or friends. If your relatives want to assist, they would have to apply to the Court of Protection to be appointed as your deputy. This can be a long and expensive process. At Hill and Company Solicitors, we can offer detailed advice on whom to appoint, and guide you through the process so that you do not have to go it alone.
2 – There are two types of LPA
You can set up two different types of LPA: a property and financial affairs LPA and a health and welfare LPA. A property and financial affairs LPA allows your attorney to act on your behalf in relation to your bank accounts, investments and property. The health and welfare LPA enables your attorney to act on your behalf in relation to your health, medical care, accommodation and life-sustaining treatment. Having both types of LPA ensures that all aspects of your life are covered.
3 – A attorney can act even though you have the full mental capacity
If you want them to, a property and financial affairs attorney can act while you have full mental capacity. However, a health and welfare attorney can only act if you lose your mental capacity and can no longer make important decisions.
4 – You can appoint as many attorneys as you want
There is no limit to the number of attorneys you can appoint. However, we recommend appointing more than one but fewer than five. You can decide whether your attorneys should act “jointly”, meaning they decide everything together, or “jointly and severally” meaning they can act together or independently. Your attorneys must only make decisions that are in your best interests. They cannot make a decision that merely benefits them. You can also appoint replacement attorneys who can act in place of your primary attorneys in the event that they are unable to act.
5 – There are no substitutes for an LPA
Having a joint bank account is not a suitable substitute for an LPA. Banks have been known to freeze accounts when they find out that one half of the couple has diminished mental capacity. Creating an LPA ensures that your attorney will have full legal right to decide what to do with your money and will allow them to access other accounts that are in your sole name. This is similar to health decisions – your marriage or civil partnership does not give your spouse or civil partner the legal right to make decisions for you.
If you would like to find out more about setting up a Lasting Power of Attorney or want to instruct a solicitor to help you through the process, contact our expert team of specialist solicitors today.