Many of us are aware that making a will is important to ensure our assets are taken care of after our death but not everyone considers what happens if they are not able to manage their affairs in their lifetime. As a population we are living longer, and it’s possible that one day you will be unable to manage your own financial affairs and welfare. In this article we consider why you should plan and arrange a Lasting Power of Attorney (LPA)
What is a Lasting Power of Attorney?
An LPA allows you to appoint an individual who will be your legal representative if declining mental health, brain injuries or physical injury leaves you unable to manage your own affairs and financial wellbeing. This attorney will represent you if you are no longer capable of communicating your own wishes.
When you appoint an attorney, you can decide when the named individual acts. For example, you can state that they will only step in if certain circumstances arise. For example, experiencing cognitive decline caused by ageing, mental health or brain injury or damage through accident or injury.
In this case, an attorney can then make decisions which will directly affect you, such as:
Where you live
The healthcare you receive
Selling your home and property
There are two kinds of LPA, which are made separately—property and financial affairs LPAs, and health and welfare LPAs.
Property and financial affairs LPAs let you appoint someone to make decisions including helping you with finances, managing your taxes and buying and selling assets. These attorneys can help you at your discretion while you still have capacity, and carry on if you lose capacity.
Health and welfare LPAs can only be used if you lose the capacity to make decisions for yourself. Attorneys under a health and welfare LPA make decisions relating to personal care, accommodation, medical consents and diet.
Both types of LPA must be registered before they are effective. Attorneys must be over 18, financially solvent and willing to take on the role. It is a serious responsibility, which shouldn’t be underestimated.
BENEFITS OF LPAS
Aside from having control over who looks after your affairs in the event you are no longer able to, LPAs have many benefits.
Accidents can happen at any age, and LPAs ensure your affairs are taken care of.
LPAs take the burden off your relatives because they do not wait for court appointment.
These are legally binding and enforceable, and they are recognised by financial and medical institutions.
LPAs don’t give attorneys the freedom to do as they please—they must still act in keeping with the Mental Capacity Act 2005, and concerns will be investigated.
If you have business interests, LPAs can ensure your business suffers minimal disruption as someone can quickly step in and look after the position.
LPAs and business interests
It is worth considering how LPAs protect your business interests in more detail. You’ve no doubt worked hard to build a business or to carve out your role in it. The risks to your business if you no longer have capability can be serious, including:
unpaid wages and loans
the loss of your home and assets if you personally guaranteed any business loans.
All these factors can have devastating consequences for your family.
With an LPA, you can appoint someone who you trust to think like you and make the decisions you’d make. They can handle these affairs for you, and you can appoint more than one so there is less of a burden on them. You can make an LPA like this separately from personal LPAs—our team can help you.
Looking after your future interests isn’t something you should put off.
At DPA Law we can give you, your business partners and your family peace of mind with our private client services.
To find out more or to book an appointment with one of our experts in wills, probate, trusts and powers of attorney, call 01554 749144