In this blog, we’re highlighting the importance of appointing a lasting power of attorney to protect you and your loved ones should the unthinkable happen.
What is an LPA?
An LPA is a legal document letting you appoint one or more people (known as ‘attorneys’) to either help you make decisions or to make decisions on your behalf. It provides greater control to you and your loved ones if you are no longer able to make your own decisions following an accident or illness.
Do I really need to make one now?
Yes, it gives you and your loved ones peace of mind. There are no guarantees in life; accidents happen and sadly the pandemic has highlighted cases where previously fit and healthy people suddenly became incapacitated and unable to make decisions about their own health and financial affairs, including the everyday tasks of paying bills.
Many people wrongly assume that if they’re married or in a civil partnership their spouse will automatically be able to access their bank account and pension to be able to pay bills or make decisions about health and care.
What powers does an LPA provide?
There are 2 types of LPA:
- health and welfare
- property and financial affairs
You may choose one or put both types in place to protect your interests. There is also the flexibility to have different attorneys for health and welfare from those for property and financial affairs.
Health and welfare lasting power of attorney – if you are unable to make your own decisions, your attorney will have the power to make decisions about things like:
- your daily routine, for example washing, dressing, eating
- medical care
- moving into a care home
- life-sustaining treatment
Without an LPA these decisions will be taken on your behalf by medical and social care professionals.
Property and financial affairs lasting power of attorney – this can be used with your permission or if you are unable to make decisions. Your attorney can act in your best interests and can take action on your behalf with your money and property, such as:
- managing a bank or building society account
- paying bills
- collecting benefits or a pension
- selling your home
What happens if I don’t have an LPA?
Without an LPA, if you unfortunately lose the capacity to make your own decisions an application needs to be made to the Court of Protection. This can be a lengthy and costly process placing additional pressure on your loved ones at an already very stressful time.
The court can:
- decide whether you have the mental capacity to make a decision
- make an order relating to the health and care decisions or property and financial decisions of someone who lacks mental capacity
- appoint a deputy to make decisions on behalf of someone who lacks mental capacity.
A deputy is similar to an attorney, following the same principles. The court will decide the deputy’s authority to act and that person has a duty to act in good faith and make decisions in your best interests.
However, it is better to put an LPA already in place so if necessary, actions in your best interest can be quickly be taken by the person or people you trust most.
How Hallidays can help
You can learn more and make an LPA online. However, if you’d like our expert advice and support, our team are here to sensitively help you with LPAs, wills, pension, estate planning and inheritance tax matters. Here’s some recent examples:
Case study one – drawdown pension:
Our team has recently worked with a client in preparation for his retirement. With our support he has put an LPA in place enabling his wife to access his income drawdown pension if the need arises, providing her with ability to increase funds to pay for any additional care costs.
Case study two – equity release:
We’ve supported a married couple to arrange equity release from the property they own. They needed an initial lump sum and wanted the flexibility of a ‘drawdown pot’ to fund any future requirements. As both parties have to sign for future withdrawals, ensuring LPAs were in place provides peace of mind that should either lose their mental capacity, the other spouse can access the fund quickly to pay for care needs and daily living expenses.
Case study three – the unthinkable:
Sadly, our team have supported families left in crisis after a sudden accident or illness has taken away or mentally incapacitated their loved one without an LPA or will in place. We’ve sensitively supported the families to identify their loved one’s bank accounts, pension funds and other sources of finance and make applications for access. As this is a lengthy process, we’ve helped them plan their short-term finances. For those new to handing the finances, we’ve also helped them gain their confidence and learn skills they need for the future.
To learn more, please contact our friendly Wealth Management Team on 0161 476 8276 or email email@example.com for support with all areas of financial planning, including estate planning, LPAs and wills.