Why Make a Lasting Power of Attorney (UK)?
Why make a lasting power of attorney (UK)?
If you ever become mentally incapable of handling your own financial affairs, having a will in place will not secure your assets or guarantee that they will be managed in line with your wishes while you’re still alive. A will only protects your beneficiaries in the event of your death, not you.
To ensure that your finances and other every-day life affairs are handled in a way that prioritises your best interests while you’re still alive, you must consider arranging a lasting power of attorney (LPA) alongside your will.
What is a lasting power of attorney?
The power of attorney refers to a legal authority that enables an individual to make important decisions on behalf of another person who lacks the mental capacity to do so themselves, including issues regarding their finances and healthcare. To grant this authority, a lasting power of attorney must be arranged.
A lasting power of attorney is a legal document set up by an individual (the donor) which gives another person (usually an attorney) the right to handle their every-day affairs if they ever become mentally incapable of doing so themselves, due to an illness, injury, or simply old age.
Although we don’t really like to think about it, the chances of us eventually becoming dependant on other people are far from slim, and as we age, the probability of needing an LPA only increases.
There are two main types of LPA: a Health and Welfare LPA and a Property and Financial Affairs LPA. The former grants an attorney the right to handle issues relating to your healthcare and other every-day dealings, while the latter allows an attorney to manage your finances (tax, pension, selling your home, paying bills and so on).
What does an attorney do?
Once the LPA has been granted, attorneys are legally required to:
- Take reasonable care and make decisions based on the donor’s best interests when acting on their behalf.
- Adhere to the terms of the LPA (specific preferences outlined by the donor, for example).
- Help the donor make their own decisions, rather than taking over (when possible).
A Property and Financial Affairs LPA allows the attorney to manage issues relating to the tax you pay, your pension, paying your bills, and even selling your property. But, you (the donor) can specify certain restrictions and requirements that must be met, such as a clause that states specific circumstances under which your house can be sold, for example.
The responsibilities of an attorney can be vast and often complicated, which is why many people turn to professional solicitors rather than family members regarding a Property and Financial Affairs LPA.
When can I arrange an LPA and who can be my attorney?
In order to set up an LPA, you must be over the age of 18 and have the mental capacity to make your own decisions at the time.
Of course, setting up a lasting power of attorney isn’t going to be the first thing on most 18-year-olds’ to-do lists, but it’s important that it is done while you are still of sound mind, so be sure not to leave it too late.
Attorneys themselves must also be over the age of 18, and you must take some time to carefully consider who you would like yours to be, as the role comes with some difficult and time-consuming responsibilities.
Before asking anyone to be your attorney, think about how well they manage their own finances, whether you can trust them to make decisions in your best interests, and of course, whether they have the time to manage your affairs as well as their own (if you choose a non-professional).
Many people in the UK tend to choose a relative or close friend to be their Health and Welfare attorney and a professional solicitor as their Property and Financial Affairs attorney, due to the complicated financial responsibilities that are often asked of them.
If you are ready to get started, you can set up a lasting power of attorney from the comfort of your own home today by using a professional online service that let you save your progress as you go along, so you don't have to finish your LPA all in one go.
What are the benefits of having a lasting power of attorney?
The main advantage of setting up an LPA is the peace of mind that it provides, as you know that you and your assets will be protected and treated in a way that represents your wishes if ever you are mentally unable to make your own decisions.
You retain a level of control over your finances and other day-to-day affairs as your attorneys are required to act in a way that prioritises you and your wellbeing, so there’s no danger of your assets falling into the wrong hands.
If you become unable to make your own decisions without an LPA in place, perhaps due to a sudden illness or unexpected injury for example, then someone else would be required to apply to become a ‘deputy’ through the Court of Protection, which is a far more time-consuming and often expensive process.
So, in summary, a lasting power of attorney:
- Helps you retain control of your affairs if you no longer can.
- Saves money (in comparison to the ‘deputy’ application process).
- Avoids delay as it is valid as soon as it’s registered.
- Provides you with peace of mind.
Is it worth having a lasting power of attorney? Absolutely, because simply having a will is not sufficient enough to protect your assets if you’re ever unable to manage them yourself while you’re still alive. In order to fully protect yourself and your assets, it’s crucial that you have both a will and an LPA in place before it’s too late.