A Lasting Power of Attorney (LPA) is a legal tool that allows you to appoint those you choose (your attorneys) to make decisions on your behalf should the need arise.
Lasting Powers of Attorney replaced the old system of Enduring Powers of Attorney (EPAs).
As we get older it is an unfortunate fact of life that accidents, or illness could strike at any time. There are currently around 850,000 people with dementia in the UK (of whom 40,000 are under 65), with this number forecast to exceed one million by 2025, according to the Alzheimer’s Society.
The important thing about LPAs is to arrange them now, while you are able to. So, if the time does suddenly come when you can no longer handle your own affairs, your LPA will ensure your spouse/partner, children or a close friend can handle important matters for you.
There are two different types of LPA:
Property & Financial Affairs LPA
This allows the people you choose to manage your finances at any time of your life. You might choose not to handle all or certain parts of your finances yourself any longer; or want a safeguard should you become unable to manage them.
Your attorney(s) could make decisions about:
- Paying your bills
- Collecting your income and benefits
- Selling your home
- Drawing down further funds from your equity release plan
- Investing money
Did you know? If you and your partner have a joint bank account, if one of you loses mental capacity then the other does not automatically have the right to access the account without a valid Property and Financial Affairs LPA in place, naming them as an attorney.
Health and Welfare LPA
A Health and Welfare LPA allows those you choose (your attorneys) to make important decisions about your health and the care and treatment you receive, but only if you lose the mentally capacity to make these decisions yourself. It is usually recommended that you appoint at least two attorneys for your Health and Welfare LPA.
The person/s you choose could make important decisions such as:
- Where you live or are treated
- Day-to-day care including your diet
- Whether to accept or refuse life-sustaining treatment
Did you know? It is a common misconception that your spouse or partner will be legally able to make these decisions for you should the time come when you are unable to. Appointing them now as an attorney in your LPA will ensure this.
Of course, we all hope this type of LPA will never be required, and whilst a Health and Welfare LPA will not assist with your equity release plan, it is none-the-less a wise document to arrange now, while you are well and capable of doing so.
Equity Release and your Property & Financial Affairs LPA
Although it is not necessary for you to have a Lasting Power of Attorney in order to take out an equity release plan, it is strongly recommended that anyone choosing a ‘drawdown’ lifetime mortgage should arrange a Property & Financial Affairs LPA.
If you are single, or the equity release plan is in just your name, then should you have an accident or start to lose mental capacity you may be unable to request further drawdowns yourself.
The same applies for a couple: both of you need to agree and sign the papers in order to release further funds. It is not enough for just one of you to be able to sign unless an LPA is in place.
An LPA will enable your chosen attorney (your spouse, for example) to sign the required papers on your behalf, enabling further releases in the future.
What happens if I do not have an LPA in place?
Should you leave arranging an LPA until you experience problems and need one then the implications can be incredibly stressful.
If you have not set up an LPA, your loved ones would need to apply to the Court of Protection to become your Deputy (this can give them similar powers to that of an attorney). This is, however, much more time-consuming and costly.
Who can be an attorney?
- You can appoint anyone you wish to be your attorney, as long as they are over 18. Most choose their spouse, sibling, children or a close friend.
- You could also ask a professional such as an accountant or solicitor (remember a professional may charge for their time).
- You do not have to appoint the same people on both LPAs.
- For a Property & Financial Affairs LPA they cannot have been declared bankrupt.
How to set up your LPA
Bower Private Clients is delighted to work in partnership with an exclusive selection of legal partners, who will be preparing these essential legal documents as part of our personalised service to you.
You will be assigned a dedicated legal adviser who will take care of everything for you and work to ensure your documents are expertly produced in accordance with your needs and wishes.
Speak to Bower today to get things started. Call free phone 0800 411 8668.