It’s normal to consider completing a Lasting Power of Attorney (LPA) as you age, however these important documents are essential no matter how old – or young – you are. Steve Wright, our Estates Director, explores why it’s so important to not only complete LPAs but also register them.
Considering what might happen if you aren’t able to make your own decisions probably isn’t something most people are keen to spend time contemplating. Although it’s widely accepted that certain documents, including a Will and LPA, are crucial, many people still fail to put them in place, with half of UK adults without a Will and more than three-quarters with no LPA. Yet with longer lifespans, and rising rates of dementia and other degenerative diseases, there is even more reason to consider putting a LPA in place.
LPAs can be extremely helpful when it comes to managing your affairs. They allow you to nominate someone else to take over the management of your finances if you become unable to do so, either for a short period of time or indefinitely. Two types of LPAs exist – one covers property and financial affairs and the other health and welfare. Both are legally binding documents, offering peace of mind, and are helpful to have ‘waiting in the wings’ for you and your family to rely on if needed. Sadly, it’s not just the situations in later life which make these documents useful – sudden illnesses or accidents can happen at any age – leaving lives changed instantly and irreversibly.
Setting up a Lasting Power of Attorney
Although you can set up an LPA at any time, it’s practical to put one in place when you first draft your Will, or when you come to review or update your existing plans. To be used by your attorneys, an LPA needs to be registered with the Office of the Public Guardian before it can be used. They must be signed by you and a “Certificate Provider”. The latter confirms that you are making the LPA of your own free will, without any duress, that you understand the implication of what you are doing and have the capacity to complete it. The “Certificate Provider” can be someone who has known you personally for more than two years. They also need to be signed by the person who you are nominating as your attorney, and their signature witnessed too. Registering an LPA means it will be officially checked, to ensure that no one is committing a fraud or exploiting your position. The process can take time, sometimes several months, but once approved you’ll receive a stamped copy confirming your LPA is valid.
Choosing an attorney
You’re free to choose your attorney from friends or family, as long as they are over 18, aren’t bankrupt, and are able to make their own decisions. Typically, it’s wise to pick someone who you trust to make important decisions, and someone who is younger than you. You can choose the same person to act as your attorney for both types of LPA, or two different people. If you feel you don’t want to burden a family member or friend with the responsibility you can opt for a professional.
Your LPA will allow you to specify how you want your attorney to act, and whether you want them to work separately or jointly with any other attorneys you have appointed. It’s a significant responsibility and will require strong organisational skills with accurate record keeping. The person you’ve chosen as your property and financial affairs attorney will make decisions about managing your bank account, direct debits, property, tax affairs, benefit claims, pensions and investments. This can be done with you, if you still have the capacity to make decisions. Anyone acting as your health and welfare attorney will step in once you become unable to do so, and can decide about your wellbeing including medical treatment, moving into a care home, and end of life care.
As the process of setting up an LPA is fairly lengthy, it’s useful to plan well in advance. You may want time to consider your choice of attorney ahead of completing the forms, getting everything signed and waiting for the registration process to run through. Be mindful that you might not want to leave it too late, and risk your family being unable to make decisions for you. Also don’t assume that your partner or spouse gets automatic rights to make decisions on your behalf. Without an LPA your spouse, partner or family member will be forced to apply to the Court of Protection to appoint someone to act on your behalf. Whilst this process takes place no-one will be able to act for you, and it can be lengthy and costly too with application fees. This can add more strain and worry to an already distressing situation.
When it comes to Estate planning make sure you haven’t overlooked an LPA. To discuss setting one up please contact your nearest office.