Many of us know that it is important to write a Will, but fewer of us have considered making a Lasting Power of Attorney (LPA).
It is estimated by the Alzheimer’s Society that by 2025 more than 1 million people in the UK will have dementia, and currently one in five people over the age of 85 already suffer from it. For those people who do not have an LPA, handling their financial affairs and making medical or care decisions on their behalf can become virtually impossible.
An LPA is a legal document in which you can appoint trusted individuals (such as your relatives or friends) to make decisions on your behalf, known as your ‘attorneys’.
You can make two different types of LPA:
Property and Affairs
This LPA will allow your attorneys to help you manage your money, property and finances, for example, they can pay your bills and transfer or invest your money for you. You can tailor the LPA to give as much or as little power as you want.
Health and Welfare
This LPA will allow your attorneys to make decisions about health and care which may include what medical treatment you receive and where you live. Obviously if you are well enough to make decisions yourself, your wishes will be paramount.
What will happen if I don’t make an LPA and then lose mental capacity?
If you do not have an LPA in place and later become mentally incapable, your relatives can apply to the Court of Protection to get a Deputyship Order. This would allow them to take control of your assets and finances. However the application for Deputyship often takes time and is costly.
But I don’t want to give up managing my affairs yet, should I hold-off making an LPA until I need it?
Do not leave it until it is too late. As with writing a Will, you need to have good mental capacity to make an LPA. Writing a Power of Attorney does not mean you give up all of your rights. Your attorneys must allow you to make your own decisions for as long as you are able, and whenever they make a decision for you, it must always be in your best interests. There are strict rules to prevent attorneys mishandling you money or making gifts to themselves and others.
If you have more questions, Rachel Saunders and the rest of our Private Client department have extensive experience in dealing with Powers of Attorney and Court of Protection matters as well as Wills and Estates. If you would like to have a confidential and informal discussion about this without obligation, please call Forrester Sylvester Mackett Solicitors on 01793 522688.