Having somebody authorised to take care of your affairs in the event of serious illness or injury is important for everyone – and not just for the elderly…
Lasting Power of Attorney
When someone is seriously ill, suffering from dementia or involved in a serious accident that leaves them incapacitated, the last thing their loved ones will want to do is fight with banks, buildings societies and other financial institutions to make sure they can ensure their financial affairs are taken care of.
Lasting Powers of Attorney (LPA) are particularly important for older people, but it is worth putting these in place whatever your age, so that should something happen to you, your spouse and family are not spending precious time and experiencing added stress trying to keep your affairs in order.
One very important thing to note is that a spouse or civil partner does not automatically have the right to carry out any of these tasks for you, so setting up an LPA giving them legal authority will make it easier for them during an already incredibly stressful and distressing time.
What is an LPA?
An LPA allows you to give someone (or someones) you trust the authority to act on your behalf – to make decisions on your behalf – should you either lose the ability to make your own decisions or not want to make those decisions for yourself.
It is important to note that an LPA takes 12 weeks to register, so it makes sense to do this now, rather than waiting until the need is urgent.
Additionally, the LPA can only be set up when you have the mental capacity to do so – the guidelines for this can be found in the Mental Capacity Act 2005. So, for anyone suffering from a degenerative condition, it is especially important that the LPA is set up while they are still reasonably well and can make decisions for themselves.
Instances which can affect anyone and where you may need to consider an LPA include:
- mental health problems
- brain injury
- medical treatment side-effects
- Drug or alcohol misuse
Different Kinds of Lasting Power of Attorney
There are two types of Lasting Power of Attorney as we explain below:
Health and welfare: This covers your care and welfare, for instance, where you might live if you lose your mental capacity, what treatment you agree to, what social activities you will take part in, even what you should eat. Your ‘attorney’, whether it be a friend, relative, husband, wife, partner or even a professional such as a solicitor, can even be given authority to decide what life-saving treatment you will have.
This kind of LPA can only be put into action if you lose the mental capacity to look after your affairs. For instance, it could be registered now, but only used should you suffer a serious injury or dementia later in life.
Property and financial: This can be used even if you still have mental capacity, unless you specify otherwise. So, it means that your LPA could make arrangements for payments to come out of a bank account or make sure pension payments are made. It can be used for decisions such as mortgage payments, buying and selling property, making investments, getting property repaired and paying bills.
If you own a business, there is another LPA, called a Business LPA.
How to register a Lasting Power of Attorney
To set up an LPA you will need a certificate provider’s statement that confirms that you had the mental capacity to understand what you were undertaking at the time of signing. You must have known the certificate provider for two years and they must be a professional, such as a doctor, solicitor, financial adviser or similar.
You can find the relevant forms on the UK Government website. The LPA must be registered with the Office of the Public Guardian before it can be put into use. The fee is currently £82 (April 2021), but there are discounts for those on low incomes or benefits.
J Finance has a sister company, Generations Estate Planning, who can help you create and register LPAs or just talk you through the process. You can find further information on the website www.jfinance.co.uk/wills-and-power-of-attorney.
It is essential to get professional advice before registering an LPA, especially if your financial affairs are complex.
If you would like to discuss setting up a Lasting Power of Attorney, a Business LPA, or any other financial matter, J Finance will be happy to help. Please contact your J Finance adviser.
Established in Berkshire in 2004, J Finance Ltd is one of the leading financial planning companies in the area. We serve clients across England and Wales. If you would like to discuss this subject or any other financial matter, please contact us on 01635 521 300 or email firstname.lastname@example.org.