A Lasting Power of Attorney is a legal document in which you can appoint someone to make decisions on your behalf, if you are unable to do so yourself. The person that appoints is known as the donor, and the person appointed the attorney.
There are two different types of Lasting Power of Attorney (LPA); a Property & Financial Affairs LPA or a Health and Welfare LPA.
A Property & Financial Affairs LPA gives your Attorney authority to make decisions relating to your finances including; bank and building society accounts, stocks and shares, ISAs, utilities, any property and transactions, as well as pensions and benefits.
A Health & Welfare LPA grants an attorney the ability to make decisions in relation to your health, medical treatment, daily routine, where you live, and general welfare.
Who should set up a Lasting Power of Attorney?
There is no right time to set up an LPA as everyone has their own unique circumstances. Having it set up before you need it lets you know your affairs will be managed as you would wish them to be.
Many associate setting up a power of attorney with ageing, and increasing concern for illness or loss of mental capacity. However there are plenty of reasons that anyone of any age might appoint an attorney.
Illness or Injury
Unfortunately there is no age restriction on being affected by illness or injury. Should anything happen which means you are too sick to take care of yourself or your finances, LPAs allow someone you trust to help and make decisions for you.
Extreme sports attract a much younger demographic, and come with high risk. Accidents can, and do, happen. If a situation leaves you stuck in hospital or confined to your home, having LPAs already in place means your attorney/s can help take care of you and your finances.
Travelling
If you are going travelling abroad for a long period of time, it might be necessary to appoint an attorney. A Property and Financial Affairs LPA would allow your attorney to take care of decisions which require you to be physically present. Helping you, for example, keep in contact with your bank, health and travel insurance provider, or phone company.
Life changing events
Just like with your Will, it’s important to put LPAs in place, and review them, following any important milestones.
When buying new property, this is likely to become your most valuable asset. You need to make sure you’re prepared if you lose capacity, or become uncontactable due to travel or unforeseen circumstances. A Property & Fiancial Affairs LPA means someone you trust will be able to make arrangements relating to your property on your behalf.
If you’re getting married you may wish to appoint your spouse as your attorney. It is a common misconception that your spouse will automatically be able to take care of your finances. If you have not set up an LPA they need to apply to the Court of Protection to become a Deputy for you. The process of gaining this is time-consuming and costly, and can also add to upset at possibly an already distressing time.
Having a child means you’re responsible for more than just yourself. It’s important to have LPAs in place so that family and loved ones can make decisions quickly and without expense.
If you own a business, depending how your business is set up, it could be worth considering an LPA. This could assist with succession planning and making decisions to limit disruption as much as possible in your absence.
For peace of mind
A Lasting Power of Attorney must be put in place whilst you have mental capacity. Therefore needs to be created before your health deteriorates.
Leaving it too late means you will be unable to appoint those you wish to be your attorneys. Leaving your loved ones to go through a long and expensive court process.
So there is no ‘right time’ to put an LPA in place. But having one ready early, and regularly reviewing it, provides peace of mind that a plan is in place.
