Regardless of age, health, and lifestyle, physical and mental incapacity can happen to any person at any moment. From deterioration due to age or an unexpected accident, there may come a time when you can no longer manage your affairs. This is where a lasting power of attorney comes in.
Abbreviated to LPA, this legal document enables you, the ‘donor’, to appoint one or several others, your ‘attorneys’, to be able to make decisions on your behalf should you be prevented from doing so. With the rise of dementia, this has become a particularly important option for families in the UK.
According to the Alzheimer’s Society, one million people in the UK will be diagnosed with dementia by 2025, but the effect on the patient’s family can be mitigated if an LPA is in place. An LPA can be made by anyone over the age of 18 who is of sound mental capacity but cannot be made retrospectively, so it is important to plan ahead.
If there is no LPA the patient’s relatives will need to apply to the Court of Protection for authority to manage their loved one’s affairs, an often costly and lengthy process. Meanwhile the family may not be able to access the patient’s assets in order, for example, to sell property or pay for care.
In England and Wales, there are two types of LPA: a Property and Financial Affairs LPA, and a Health and WelfareLPA. You can make one or both. Each is treated as a separate form of authority, so if you appoint an attorney for only one type of LPA the powers set out in that document are the only powers the attorney will be able to exercise.
A Property and Financial Affairs LPA gives attorneys authority to manage savings and accounts, to sell or buy property, as well as receiving benefits or a pension, and paying bills. A Health and Welfare LPA enables the attorney to make decisions regarding daily care, medical treatment, and, if applicable, moving into a care home. You can also make separate LPA as part of your business succession planning for additional peace of mind.
The process of applying for an LPA is relatively straightforward, but there are a number of snares. There may be financial or family matters to be considered which do not occur to the non-lawyer. It is essential that, in order to be effective, the various pages of the document are signed in strictly the correct order, properly witnessed, and contain no errors, corrections or omissions.
In England and Wales, you will also need to choose ‘certificate provider’ who will sign the LPA as well. This willeither be someone you have known for at least two years, or someone within an applicable profession, such as a doctor or lawyer.
At A M Davies we find that even when carefully advised on how to sign the forms, our clients (or their witnesses or certificate providers) very often make mistakes resulting in a need to start again with a fresh copy for signature. We check all the forms extremely carefully, and only then register them with the Office of the Public Guardian (which can take up to 20 weeks),
There are fees to pay to the OPG on application (currently £82 per LPA, with discounts available for those on benefits or earning less than £12,000 per year).
Creating an LPA is a formal process and can be confusing.
At A M Davies, we have helped many individuals create LPAs specific to their needs. The great advantage is that these clients know for certain that the LPAs they have made are correct and effective. Download our free digital guide for more information on LPAs or contact Jeremy Clough directly to discuss your options.