Who will make decisions about your health and finances when you can’t?
If you want someone to be able to look after your affairs if you become incapable (for example, if you start suffering from dementia, or have a stroke etc.), you need to use a special kind of power of attorney, called a Lifetime Power of Attorney (LPA).
A LPA allows you to appoint someone (or up to 4 individuals) you trust to act as ‘attorney’ for you.
You can prepare a LPA whenever you like, provided you have the mental capacity to understand what you are doing. However, the LPA does not take effect until it has been registered with the Office of the Public Guardian.
There are two separate kinds of LPA, covering different issues:
Property and financial affairs.
Health and welfare.
A property and financial affairs power of attorney, appoints an attorney to make decisions relating to dealing with your bank accounts; handling day-to-day finances; dealing with taxes and making gifts that you used to make (e.g. birthday presents to relatives) on your behalf.
A health and welfare power of attorney, appoints an attorney to make decisions such as, giving or refusing consent to particular medical treatments, deciding whether you should continue living at home or move into a residential care home.
You can choose to have only one type of LPA or both.
Almost anyone over the age of 18, including your spouse, can be appointed as an attorney (though someone who is bankrupt cannot act as an attorney under a property and financial affairs LPA).
The nominated attorneys can manage your finances for you when you no longer wish to do so for yourself or if you reach a point where you are no longer able to make decisions. For your security, they can make decisions relating to your health and welfare only when you are unable to do so.
It is important to understand that LPAs are not just for the elderly – mental and physical incapacity can occur at any time, so at Magenta we encourage our clients to plan ahead, to ease the potential burden on loved ones.
It is always a good idea to have an LPA in place at an early stage when you have the choice of appointing someone you love and trust to this position, otherwise the Court of Protection may intervene and manage your financial affairs for you. In our experience, this makes every decision time consuming and complex.
The benefits of having an LPA in place are:
Save money in the long term– Without an LPA the Court of Protection may step in to manage your finances and the legal fees could amount to thousands of pounds. Your family members would have no say in how your money is to be spent.
Peace of mind – People you trust and those who love you will be allowed to manage your affairs under an LPA when the need arises, rather than an unknown lawyer appointed by the Court of Protection or the local authority.
Save distress to your family – Without an LPA your loved ones will find it very difficult to manage your financial affairs for you as they will have no legal authority to do so. This will only add to the stress of possibly having to look after your personal needs because of a potential incapacity.
Prevent financial hardship to your family – If you are a joint account holder and the other joint account holder becomes mentally incapable, you do not automatically have the right to access the account unless you have an LPA or an Order from the Court of Protection. If the joint account is frozen this could result in severe financial hardship for a spouse/partner who is not be able to access the monies in the account.
We are able to recommend a suitable solicitor to assist you with making a LPA if you require, just give us a call and we can discuss this. Alternatively, you are able to register your own LPA if you feel you are comfortable with online systems. This can be done here https://www.lastingpowerofattorney.service.gov.uk/home
Before you begin you will need to decide who you would like to act as your attorney, and check that they are willing to be appointed. If in doubt, give the Magenta team a call and we can talk you through the process.