Why setting up Lasting Powers of Attorney (LPAs) is one of the most important things you can do!
Why setting up Lasting Powers of Attorney (LPAs) is one of the most important things you can do!
None of us like to think about a time when we might not be able to make decisions for ourselves (i.e. if you lose mental capacity) and many people assume that their spouse or close family member will automatically be able to make these decisions for them. Life can be unpredictable and by creating an LPA, it allows you to appoint someone you trust to step in and make decisions on your behalf if that day ever comes.
What is an LPA?
It is a legal document that allows you to appoint one or more people (known as attorneys) to help manage your affairs and gives them authority to make decisions on your behalf. Without an LPA, your loved ones would have no legal right to step in to make decisions if you have lost capacity, even if you are married.
Creating an LPA will avoid this and puts you in control of deciding who acts for you and set limits on what they can and cannot do.
Types of LPAs:
There are two types in England and Wales – one for Property and Financial Affairs which covers things such as bank accounts, selling properties and paying bills and one for Health and Welfare which covers medical treatments, care arrangements and life-sustaining treatment. Most people decide to set up both types to ensure that all aspects are covered.
It is important to note that an LPA for Property and Financial Affairs can be used as soon as it is registered, even if you still have mental capacity, as long as permission is granted by you (for example, if you was going into hospital for a period of time and you needed someone to take care of things whilst you are out of action). However, a Health and Welfare LPA can only be used once capacity has been lost and cannot be used to override your wishes while you still have the capacity to make decisions for yourself.
Common Mistakes:
“I am too young to need one” – LPAs are not just for older people. Accidents and sudden illnesses can happen at any time during your life and so setting one up when you are young, healthy and thinking clearly is the most stress-free time to do so.
Choosing the wrong attorney – Sometimes people can choose an attorney because they feel obligated to do so. You should choose the person that is the right fit, you trust completely and that will be able to handle potentially difficult situations.
Getting the signing process wrong – The LPA must be signed in a certain order and properly witnessed. If the forms are not signed in the correct order, they can be rejected by the court.
Important Things to Note:
- You must set up an LPA whilst you have mental capacity – you and your family cannot do this once capacity is lost.
- Having a Will is not the same thing – a Will only takes effect in managing your estate after death. An LPA covers you during your lifetime.
Taking the Next Step
Setting up LPAs is one of the most important things to do and here at Tolhurst Fisher, our Private Client team would be happy to assist you with this. Our current charge for creating and registering both types of LPAs is £900 plus VAT and £1,300 plus VAT for couples.
It is important to note that the Office of the Public Guardian (the court who deals with the registration process) charge a registration fee of £92 per document.
If you would like to discuss LPAs further, please contact Beth Harvey in our Private Client department who would be happy to help.
Author: Beth Harvey
