What is a Lasting Power of Attorney?

You may have an up to date Will, and feel comfortable that you have everything covered, should the worst happen. 

But if you become incapacitated, either temporarily or permanently, what would happen then?

This is where a Lasting Power of Attorney can help.

So, what is a Lasting Power of Attorney (LPA)?

In a nutshell, it is a legal document naming a trusted relative or friend to make decisions on your behalf should you lose mental capacity.

You may have heard of a Power of Attorney, but this was expired in October 2007, in favour of Lasting Powers of Attorney.

There are two types of LPA: Health and Welfare, and Finance and Property.

You can appoint different people as your named decision maker for each document, so if you feel one person is better placed to make decisions over your health and ongoing welfare, but somebody else is a better choice for your financial matters, you can do that.

They are two separate documents, so even if the person named is the same for each, you will need to have both drawn up.

Why would you want to set up LPAs?

Because, if you are unable to make decisions for yourself, your family would have to apply to the courts to become your deputy. This is a costly and lengthy process, and would put unnecessary stress on your loved ones, at a time when they are likely to already be feeling the pressure.

It’s important to note that an LPA can be used intermittently. So, should you fall into a coma, for example, your Power of Attorney would make decisions on your behalf, until you wake up, and are able to make your own decisions again.

When making a decision about who is best placed to take on the role on your behalf, you need to be confident that they will have your best interests at heart. You also need to be certain that they know your wishes. If you are suffering from ill health, would you want to be resuscitated? If you are involved in an accident, would you want to be kept alive, if you were going to remain permanently immobile? All of these decisions could be covered in a living will, but we will leave that to another day.

Nevertheless, it is vital that the people named as your attorney know what decisions you would make, should you be able to do so.

What is covered in an LPA for Health and Welfare?

  • Where you live
  • How you live – what you like to do, your appearance, your lifestyle, your daily routine
  • Medical treatment
  • Care – in your home, hospital or care facility
  • Diet – likes and dislikes
  • Pets – what to do if you are unable to care for them any longer

This is all about trying to give you the best quality of life possible, knowing you. 

Whilst one person may be named as your attorney, it is reasonable to expect them to consult with other close members of your family about key decisions. 

Decisions should be documented, so should your mental capacity return, you can be confident the right decisions were made for you. And you have chosen the right attorney.

What is covered in an LPA for Finance and Property?

  • Bank and building society accounts
  • Investments and savings
  • Pensions
  • Benefits
  • Money, tax and bills
  • Property

Your attorney can access the money in your accounts to cover your day to day living costs, such as running your home and buying food. Unless you have specified otherwise, they could also continue donating to your favourite charity, and buy small gifts for family and friends, as you would have done, were you able to do so.

Bigger decisions like gifting your property, or selling below market value, or making substantial payments such as fees for education, would need to be approved by the Court of Protection.

Your attorney’s own finances would need to be separate from yours, unless you already have a joint bank account. They would be expected to account for how they have used your money, independently of their own.

As you have probably guessed, Lasting Powers of Attorney are quite complex. We have barely scratched the surface in this article.

You are handing over significant responsibility and power to other people, so it is vital that you choose wisely, and get these documents drawn up correctly. Getting it wrong can be a very expensive mistake, in so many ways. 

If you would like help with drawing up a Lasting Power of Attorney, please give us a call on 01344 875 310.

Lasting Power of Attorney