10 reasons why you should set up a Lasting Power of Attorney (LPA)
Setting up a Lasting Power of Attorney (LPA) is often a simple process however, many people delay doing this until it’s too late. There can be many excuses for not organising it, but the most common, is that it is believed to be only relevant to the older generation.
The truth is, you could lose mental capacity at any time — either from a serious injury or accident, a disease or illness. By the time you need it, you may be too late if you haven’t set up a Lasting Power of Attorney.
There are many reasons why you should set up your LPA as soon as possible. Here’s our top ten;
1. A Lasting Power of Attorney is flexible
While it is possible to set up an ordinary Power of Attorney for a specific situation, this is fairly rigid. It normally only lasts twelve months and then expires, after which you would have to go through the whole process again if you need one on another occasion.
An LPA, continues indefinitely unless you decide to cancel it while still in possession of mental capacity.
2. You can choose who acts as your Attorneys
When you set up an LPA, who you choose to appoint as your Attorneys is completely up to you, the only restrictions are that they must be over eighteen, have full mental capacity and be willing to undertake the role. Most people appoint a spouse or partner or a close family member, but the important thing is that you choose those people you can trust to act in your best interests.
If you should lose capacity without an LPA in place, your relatives will have to go to the Court of Protection to apply for a Deputyship – a costly process. While the Court will make every effort to act in your best interests, you cannot assume that they will make the decision you would wish for and choose who you would want to act as your Deputy.
3. You can appoint different types of Attorney
There are two different types of LPA – covering either Property and Finance or Health and Welfare. These will have distinct roles and you can choose whether to appoint the same person to both roles or to spread the workload.
If you do not have a Health and Welfare LPA, the Court of Protection is unlikely to appoint a Deputy for this role. The likelihood is that decisions about how you are looked after may be taken by the Court without knowledge of your wishes.
4. You can specify instructions and preferences
In the LPA you can specify instructions or preferences to your Attorneys. Instructions are binding, and your Attorneys must follow them. This may include, for example, requirements about medical treatment or an instruction not to sell a home you intend to leave to your partner or children.
A preference, on the other hand, is something the Attorneys must take into consideration but are not obliged to follow. This may be because there has been a change in your situation and you, therefore, give them the opportunity to consider your best interests at this time.
5. You can specify how your Attorneys will operate
You can choose whether your Attorneys and jointly on all decisions, jointly and severally or jointly or some decisions and jointly and severally on other decisions.
Jointly and severally means that Attorneys are able to work together and if an attorney was on holiday or unable to act the other Attorney would still have power to act. You can specify different options for different types of decision. For example, you could allow them to act jointly and severally for your general finances, but specify that they must act jointly if they wish to sell your property.
6. You can appoint replacement Attorneys
One of the reasons sometimes given for leaving it till later in life to set up an LPA is the uncertainty of whether the people you appoint will remain available. This is not really a problem as you can appoint replacements, even if a problem arises after the LPA has been activated. Appointing replacements ensures that you have remaining Attorneys to be able to step in and act if necessary. By contrast, if a Deputy can no longer act, it has to go back to the Court of Protection for them to decide who then acts as your Deputy.
7. You can control what your Lasting Power of Attorney will be used for
If your affairs are complex, you may well wish to exclude an Attorney from a specific area. This may apply, for instance, if you own a business or are a Director and one of your Attorneys could have a conflict of interest.
Similarly, you could decide to divide up other aspects of the role between Attorneys. For example, you could have one Attorney dealing with your general finances and another specialising in handling your stocks and shares.
8. You can have a Lasting Power of Attorney for your business
If you wish, you can set up a business LPA for each business you are involved in. These will be separate from your personal Finance and Property LPA, as Attorneys may either decide to sell your stake in the company or continue the role in your interests. As with other decisions, you can specify which you want, if you so desire.
9. A Lasting Power of Attorney can be put in place sooner
If your family have to apply for a Deputyship, this is a long, drawn-out procedure. It can take up to a year for a decision to be made, and until then you will be in limbo, with no-one authorised to act in your interests. This may, for instance, include not being able to buy essential equipment or modifications for your health condition.
An LPA, by contrast, is available as soon as the application has been activated by the Office of the Public Guardian which takes approximately six weeks.
10. A Lasting Power of Attorney is the most cost-effective solution
Besides being the most efficient method of protecting your affairs, an LPA is a the most cost-effective option by far.
If going through the Court of Protection, there’s the Deputyship set up, the regular annual supervision fee, as well an annual bond. This will all have to come out of your finances, before anyone can even start to protect them.
At Osborne Morris & Morgan, we are offering half price LPAs, when you write your Will with us at the same time – so you can save even more. For more information, please contact our expert Lasting Powers of Attorney team.
Whichever way you look at it, setting up a Lasting Power of Attorney is the best possible way of protecting yourself in case of losing mental or physical capacity, and the sooner you do it, the better. To discuss setting up an LPA, please get in touch with us today.