Radio 4’s “Moneybox” programme ran an episode earlier this week about Lasting Powers of Attorney (“LPAs”), setting out “best advice” and exploring with members of the public the issues which they had experienced when making and using LPAs, and the difficulties they had faced in situations where there was not an LPA in place.
An LPA is a formal document which gives someone the legal right to make decisions on your behalf. There are two types of LPA: one allows you to delegate the decision-making process in relation to your assets and financial affairs generally, and the other allows you to delegate decisions in relation to your health and medical treatment (although this second type of LPA can only be used after you have lost the capacity to make decisions for yourself).
In many ways, an LPA is even more important than a Will: if you die without having made a will (“intestate”), there are rules which automatically apply, which allow your family to deal with your Estate. But if you lose capacity and do not have an LPA in place, your finances are immediately frozen and your family’s wishes about your health and welfare can legally be overridden by medical professionals and/or social services. Having an LPA in place allows you effectively to retain control over the process by appointing someone who you know, and who will understand what your wishes would have been, and to act accordingly.
The “Moneybox” programme highlighted the difficulties that can arise particularly in relation to financial matters in the absence of an LPA: your bank, your financial adviser and your pension provider cannot talk to your family without your consent which, if you have lost capacity, you cannot give. A process exists to allow a “Deputy” (effectively a Court-appointed attorney) to be appointed to manage things on your behalf, but it is much more expensive than making an LPA and, more importantly, takes a long time to complete – a year or more is not unusual – during which period everything is frozen, often making even more complicated the issues with which your family is faced.
It is possible also to make more than one financial LPA – this can be very useful in a business context, where you may, for example, want to authorise your business partner to make decisions relating to (say) your company on your behalf, but to appoint your spouse/civil partner or children to manage your personal financial affairs. Again, in this situation, an LPA allows you to exercise far more control over things than would otherwise be the case.
LPAs are most often thought about in the context of elderly relatives and dementia, but the truth is that they are something which everyone should be considering, whatever their age – sadly, accidents can, and do happen, and circumstances can and do change suddenly and unexpectedly. The emotional issues with which your family would be dealing with in that situation are difficult enough, without them also having to face entirely avoidable practical problems too.
To speak to us about Lasting Powers of Attorney, please contact your local office or email us on enquiries@fsmsolicitors.co.uk