What are Lasting Powers of Attorney?
Often people assume that if they have Wills in place, they do not need to have Lasting Powers of Attorney. Wills and Lasting Powers of Attorney (LPAs) are two completely different legal documents. So what is a Will and what is an LPA?
Will – This sets out how your assets are to be distributed and you appoint Executors to ensure that they deal with your Estate on your death. The provisions in your Will only come into effect on your death. Therefore, Executors cannot deal with your affairs until your death.
Lasting Power of Attorney– This is a document that allows you (the donor) to appoint one or more people (attorney(s)) to deal with your matters including making decisions when you are unable to. You need to have mental capacity at the time you make a Lasting Power of Attorney. On your death, your Lasting Power of Attorney will come to an end and your Attorneys will not be able to deal with your matters.
The two types of Lasting Powers of Attorney: –
1. Lasting Powers of Attorney for Property and Financial Affairs:
This power deals with your property and financial affairs. For instance, your attorney(s) can assist you with managing your bank accounts, pay bills, deal with investments and sell your home. An Attorney can act for you under a Property and Financial Affairs LPA whilst you have mental capacity and only with your consent and if you lose mental capacity to make decisions for yourself.
2. Lasting Power of Attorney for Health and Welfare
This power relates to matters such as decisions about where you should live, the type of medical care or social care you should receive and also whether your attorneys can deal with life sustaining treatment to include authority to consent or refuse to life sustaining treatment. An Attorney can only act for you under a Health and Welfare LPA when you are no longer able to make decisions for yourself.
You can choose to make one or both types of Lasting Powers of Attorney. By having both types in place, you will cover more eventualities and ensure that those you appoint as your attorneys make and assist you with both your financial and health and welfare decisions.
Why is it important to have Lasting powers of Attorney?
People often assume that Lasting Powers of Attorney are for the elderly. However, anyone at any age can become reliant on others to help manage their matters after an accident or a sudden medical condition or illness. Age related conditions can also mean people will need assistance from others to help with important decisions. Having Lasting Powers of Attorney allow you to make plans for the future and also reduce family conflict as you can set out your wishes and who you would like to make decisions for you when you are unable to.
When there is a Lasting Power of Attorney in place this can greatly assist anyone close to you that will be helping you to manage your matters as they will be able to make decisions on your behalf or help you make those decisions. Your attorneys can deal with any financial transaction that you would normally deal with yourself. The COVID-19 pandemic has increased the need for LPAs more than ever with people self-isolating and unable to get out.
What may happen if you do not have Lasting Powers of Attorney?
It is a common misconception that your loved ones will be able to make decisions for you when are no longer able to make decisions for yourself. When a Lasting Power of Attorney for Property and Financial Affairs is not in place and you are no longer able to manage your financial affairs, then an application to the Court of Protection for a Deputy to be appointed would need to be made. This is a long and more expensive process. Jointly held assets may not be sold until a Deputy has been appointed by the Court of Protection.
If a Health and Welfare Lasting Power of Attorney is not in place, then an application would also need to be made to the Court of Protection for a Deputy to be appointed. Often these types of applications are refused because the Court of Protection tends to make an order for specific decisions that need to be taken. Therefore, without a Health and Welfare power, decisions will be made by medical professionals and social services. Unfortunately, without a Lasting Power of Attorney, next of kin will not have the final say in these situations.
Who to appoint to act as your Attorneys?
You can choose anyone who has mental capacity and is over the age of 18 years. We advise our clients to appoint attorneys that they know would look after their finances and who they can trust will make the appropriate decisions in their best interests. You will also need to check your attorneys are happy to be appointed by you.
Many people tend to appoint a spouse, partner, children, grandchildren, relatives and or friends.
When can your Attorneys start to assist you?
Your Lasting Powers of Attorney can only be used after they have been registered with the Office of the Public Guardian. The Office of the Public Guardian usually take around 12 weeks to register the Lasting Power of Attorney documents.
It is important to seek legal advice when making Lasting Powers of Attorney. If the Lasting Powers of Attorney are completed incorrectly, they will be rejected by the Office of the Public Guardian and you may incur additional costs and delay.
If you would like any advice or wish to discuss making Lasting Powers of Attorney, please get in touch with our Wills and Probate team.
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