Life is full of ups and downs, pleasures and pains and uncertainties.
Non of us know what the future holds for us and so it’s sometimes difficult to know what we are preparing for. However, if we consider life to be a journey, it has a beginning, a middle and an end.
In a previous article we have looked at the importance of Making a Will. Of course making a Will means that you are “sound in mind and body” enough to make that Will.
Not only do we need to look at end of life planning we also need to plan for the unexpected whilst we are still living. This is where Lasting Powers of Attorney come in.
A Lasting Power of Attorney (LPA) is a legal document which empowers others to act and make decisions on your behalf when you cannot.
There are two areas of your life a lasting power of attorney can address. One covers financial matters and the other personal welfare.
However, before we look in more detail at these, its also important to know that there are three types of Powers of Attorney.
Ordinary power of attorney
This covers decisions about your financial affairs and is valid while you have mental capacity. These are often put in place when you need short term cover for a temporary period, Perhaps if your are hospitalised, on extended holiday or if you find it difficult to get out and about.
Lasting power of attorney (LPA)
An LPA can come into effect if you lose mental capacity, or if you no longer want to make decisions for yourself. You would set up an LPA if you want to make sure you’re covered in the future.
Enduring power of attorney (EPA)
EPAs were replaced by LPAs in October 2007. However, if you made and signed an EPA before 1 October 2007, it should still be valid. An EPA covers decisions about your property and financial affairs, and it comes into effect if you lose mental capacity, or if you want someone to act on your behalf.
What is Mental Capacity?
Age UK defines mental capacity as …
“…the ability to make or communicate specific decisions at the time they need to be made. To have mental capacity you must understand the decision you need to make, why you need to make it, and the likely outcome of your decision”.
LPA for Financial Decisions
An LPA for financial decisions can be used while you still have mental capacity or you can state that you only want it to come into force if you lose capacity.
An LPA for financial decisions can cover things such as:
- buying and selling property
- paying the mortgage
- investing money
- paying bills
- arranging repairs to property
You can restrict the types of decisions your attorney can make, or let them make all decisions on your behalf.
LPA for health and care decisions will cover things such as:
- where you should live
- your medical care
- what you should eat
- who you should have contact with
- what kind of social activities you should take part in.
Such an LPA can be used once you have lost mental capcity
Now, here’s the important bit..
If you’re married or in a civil partnership, you may have assumed that your spouse would automatically be able to deal with your bank account and pensions, and make decisions about your healthcare, if you lose the ability to do so.
This is not the case.
Without an LPA, they won’t have the authority and without an LPA in place your family will have to apply to the Office of Public Guardianship (OPG) to act on your behalf. This will also affect any joint bank accounts you hold, they will be frozen unless you have a registered LPA in place.
If you do not have an LPA in place you will have to apply to the OPG the process for completing this can cost YOU up to £5000 and can take months to complete all the while you will not have access to your accounts.
Setting up an LPA is fairly straightforward but it’s often best to have the guidance of a professional since some of the wording can be confusing.
You will need to register the LPA before you can use it. In England and Wales, the registration fee is £82 for each LPA – so it costs £164 to register both an LPA for property and financial affairs and an LPA for health and welfare.
You can save yourself some money by doing the form filling yourself. The application forms from the Office of the Public Guardian (OPG) contain help sheets to help you fill them out. Alternatively, you can fill them in online and phone the OPG helpline if you have any issues or concerns.
Remember, the person or persons nominated in your LPA are known as your Attornies and thus are delegated to act on your behalf in key areas of your life, livelihood and wellbeing. So, it goes without saying that these need to be people you can trust to carry out their legal and personal obligations and protect yours.
Whilst we cannot be certain about our futures we can feel secure in the fact that we have planned as best we can for it.
