Thinking and talking about what would happen if our faculties deserted us is uncomfortable. Yet it’s important to consider how much worse the situation would be if you had a stroke, serious accident or dementia without sorting it first.
If someone has difficulties that mean they can’t make decisions anymore, they will need help managing their finances. A Lasting Power of Attorney (LPA) is a legal document where someone (while they still have mental capacity) nominates a trusted friend or relative to look after their affairs if they lost capacity. The key point to remember …
Don’t think you suddenly give up control. You can choose whether it can be used either before, or only when, you lose mental capacity.
Your representative should only ever make a choice for you if you’re unable to make that specific decision at the time it needs to be made. For example, if you fall into a coma, your representative would start looking after your affairs. Yet if you wake from the coma, you should be able to make your own decisions again.
It’s worth noting LPAs replaced the previous Enduring Power of Attorney (EPA) system. EPAs set up before 1 October 2007 will still be valid, whether or not they have been registered, though they must be registered when the person loses capacity.
Why set up a Lasting Power of Attorney?
If you lose mental capacity, unless you’ve already filled in the Power of Attorney forms, your loved ones will need to apply through court to become ‘deputy’, a long and expensive process.
Instead, you can nominate a trusted friend or relative before you lose capacity, by setting up a Lasting Power of Attorney (LPA). You can appoint one or more representatives to act for you and can determine how they work together to make decisions on your behalf.
Mention an LPA and many will automatically think of a person’s finances, but there are actually two types to consider: one for finance and property, and another for health and welfare.
The Health and Welfare Lasting Power of Attorney
The health and welfare document sees a nominated individual make decisions over day-to-day healthcare and medical treatments, as well as deal with any health and social care staff. It’s also worth noting these are two separate legal procedures that are independent of one another.
Just because you give the trusted person power of attorney over your health, that doesn’t mean they will automatically gain control over your financial affairs and vice versa. If you require the same individual to have power of attorney over both aspects of your care, then you will have to fill out the two forms separately.
Another key difference is that the health and welfare LPA can only be used after the person loses capacity, not before.
Property and Financial Affairs Lasting Power of Attorney
A Property and Financial Affairs LPA allows your chosen person to handle your bank accounts, investments, bills and property.
- If you lose mental capacity without a LPA, it can cost your family time and thousands of pounds to be given permission to handle your affairs.
- Without a LPA, any joint bank accounts you hold with your partner would become severely restricted.
- This can be devastating, especially if the joint owner has their income or pension paid into this account, or they use it to pay critical bills such as a mortgage or utility costs.
