While an estimated 40 per cent of people reading this have made a will, fewer than one per cent will have a Lasting Power of Attorney (“LPA”) in place.
In fact, 45 per cent of people aged over 45 don’t even know what one is! But making an LPA, a legal document that allows people to make decisions on your behalf if you can’t, is one of the most important things you can do to protect yourself and your loved ones.
What is an LPA?
An LPA is a legal document that allows you (the Donor) to appoint somebody or a number of people, called attorneys to act on your behalf and make decisions for you if you become mentally incapable of making decisions for yourself.
Separate powers of attorney are available for your property and financial affairs or health and welfare decisions. You can have one or the other or both. You can also create a power of attorney to cover business decisions.
Many people do not realise that even if they consider their affairs to be simple in nature, complications can arise if they do not have an LPA in place
Joint bank accounts
People often think that if they hold their bank accounts in joint names, with another person then they do not need an LPA. However, this is not the case, once a joint bank account owner loses capacity, the back account could be frozen in line with British Banking Association directions. This is because both account holders can no longer consent to the operation of the joint bank account. Naturally this could give rise to complications if access to the account funds are required.
Joint property ownership
Similar complications can arise with joint property ownership. If one joint property owner loses capacity, then both property owners can no longer consent to the sale of the property. Whilst there may be the ability to complete the sale of the property by the appointment of an additional trustee, the problem then arises as to who can give valid receipt for the funds due to the incapacitated joint owner. This could result in the need to make an application to the Court of Protection for a Deputy to be appointed which can generally take between 6 to 12 months and is often more expensive than putting in place LPA.
Health and Care decisions
If somebody loses capacity to make decisions about their health and care, then if they do not have a valid LPA in place, these decisions stand to be made in accordance with best interests principles under the Mental Capacity Act. This could result in a care manager in social services or a medical practitioner being appointed as decision-maker for the incapacitated person. It is often thought that the person’s next of kin (i.e. spouse or children) would be able to make the health and care decisions but this is not always the case. The next of kin should be consulted about the decision, but the final say does not necessarily rest with them.
Who is it suitable for?
Anyone over the age of 18 years who wants a choice over who will make decisions on their behalf if they are unable to do so.
When can you make one?
The power of attorney must be created whilst you have mental capacity to understand the document.
In respect of property and finance it can be used by your attorney/s whilst you have capacity if you instruct them to use it or if you lose mental capacity. In respect of health and welfare it will only be used if you lack mental capacity.
How can I make one?
For more information or to make an LPA, contact Carina on 01743 284143 or firstname.lastname@example.org
Carina Kervin is Regional Director for Shropshire Solicitors for the Elderly. She deals with a range of private client matters including wills, powers of attorney, care fees, tax planning and probate.