Plan ahead with a Lasting Power of Attorney?
A lasting power-of-attorney (LPA) is a legal document that allows you (the ‘donor’) to appoint someone you trust giving them the power to make decisions on your behalf (the ‘attorney’) whilst you are still alive but are unable to deal with your own affairs or make your own decisions (for example, as a result of an illness or accident).
Preparing an LPA is the only way to ensure that you choose the person you want to make your decisions for you. It also allows you to set certain restrictions or provide your attorneys with some guidance if you would like.
There are two types of LPA, one dealing with property and financial affairs, the other with health and welfare.
Property & Financial Affairs LPA
A property and financial affairs LPA allows you to choose one or more persons to make decisions and manage your property and money. A property and financial LPA can be used as soon as it has been registered, then on and off as often as needed. This can be useful if you are immobile for a short time, for example during a short stay in hospital, or if you would like someone to run your finances whilst you are on holiday or away from home. It can also be used on a more permanent basis for people suffering from a long term illness such as dementia.
Health & Welfare LPA
A health and welfare LPA provide your chosen attorneys with the power to decide on your ongoing medical and care needs. You can also provide your attorneys with the power to refuse life-sustaining treatment on your behalf. The health and welfare LPA can only be used once you have lost the capacity to make these decisions yourself.
It is important to remember that these two types of LPA are completely separate documents. If you would like to choose someone to look after your finances and also provide guidance on your medical treatment, it will be necessary to complete two LPAs.
What happens if you don’t have an LPA
If you become unable to manage your own affairs and you do not have an LPA in place, financial institutions are under an obligation to freeze your assets so that your funds cannot be accessed. Although the intention behind this is to protect you from possible abuse whilst you are well, it also means that your family and dependents would have no access to your money when they may need it. Even a joint bank account maybe frozen if one of the owners becomes incapacitated.
It is not possible to make an LPA unless you have full mental capacity and someone else on your behalf cannot apply it for. If you do lose your capacity and have not put the LPA in place, then your family will need to apply to the Court of Protection for a deputyship order. It will then be up to the court to decide who is appointed as your deputy and what restrictions they will have.
The court’s priority will be on your protection rather than your family’s well-being and there is no guarantee that the court will choose the person you would have liked. Depending on the circumstances they may decide to instruct a professional deputy, which would come at a further cost. In addition to the loss of control, there is also a significant cost to making a court application and the process can be extremely time consuming and lengthy – up to six months. It is always advisable to plan for the possibility, even if you are not expecting to need an LPA any time soon. Unfortunately, you cannot always predict the onset of an illness or an accident.