Lasting Powers of Attorney (LPAs) allow you to nominate one or multiple people you trust (usually close family members, or someone you trust) to manage either your financial affairs or decisions relating to your health and welfare. The people you nominate to manage your affairs are called your attorneys, and the person who is the subject of the Power of Attorney is called the donor.
Lasting Powers of Attorney function as a crucial protection, allowing people you trust to step in if a condition like dementia or advancing age means that you are not able to manage independently anymore. Legally, this is referred to as loss of capacity and is the trigger for the Power of Attorney to transfer crucial decision-making to your nominated attorneys.
It is important to remember that these are two separate documents:
- Property and Financial Affairs
- Health and Welfare
So, you will need both documents in place to ensure both aspects can be managed by your nominated attorney(s). This can be important as many of these areas can overlap, especially in old age when care needs can be costly.
What specifically is covered by the two types of LPAs?
Health and Welfare
For the health and welfare LPA, key decisions could include:
- Medical care – such as choices regarding medication and treatment options
- Daily routine involving eating, dressing and washing
- Where the donor lives, for instance in a care home or assisted living facility
Healthcare organisations and financial institutions such as the NHS or banks will usually require evidence of a registered LPA to allow the attorney the authority to make relevant decisions on behalf of the donor. These can be provided in the form of a certified copy of the LPA.
Property and Financial Affairs
For the financial and property LPA attorneys can make the following decisions:
- Managing their bank accounts
- Selling owned property or buying a property for the donor to live in
- Paying bills, debts and tax owed by the donor using their money
- Managing investments, pensions and benefits
General Power of Attorney
Another type of Power of Attorney is the General Power of Attorney or GPA, which is a more limited type of Power of Attorney which grants the authority for someone to manage your property and financial affairs temporarily.
This is usually used in the case of illness or to manage assets while you move abroad. General Powers of Attorney are strictly time-limited and cannot be used for health and welfare decisions.
Why are LPAs so important?
With the UK’s ageing population, the protection that LPAs give people against age-related conditions such as dementia have never been more relevant and needed.
According to UK government statistics, 1 in 3 of adults over 65 will develop dementia but worryingly 78% of UK adults have no Power of Attorney in place to protect them (according to insurer Canada Life UK).
Lasting Powers of Attorney must be created while the donor still has the mental capacity to be able to make the decision. This means that once dementia or cognitive decline has already taken hold, it is too late to make a Power of Attorney.
Without a Power of Attorney in place, family members are not able to intervene and help with key financial or health decisions and must instead apply for permission from the Court of Protection to act as a deputy.
This is a lengthy and costly process that can take months and hundreds of pounds in fees, along with the distress of being unable to help a loved one in serious need of help. This is why we always recommend making a Power of Attorney well before you think you will need it.
Get your LPAs in place today
So, whether you’re looking to create a Power of Attorney for yourself or a close family member, here at QualitySolicitors Gould & Swayne we have the expertise to protect you and your family from whatever the future holds.