Lasting Power of Attorney (LPA)
It could be argued that a Lasting Power of Attorney is even more important than a Will, simply because of the harrowing consequences for your family if an LPA is needed but is not in place. There may come a time in your life when you are unable to manage your financial affairs or personal welfare, owing to some form of incapacity. A Lasting Power of Attorney gives someone you trust the legal authority to make decisions on your behalf, if either you’re unable to in the future, or you no longer wish to make decisions for yourself.
These are the types of LPA:
LPA Property & Financial Affairs
A Property & Financial Affairs Lasting Power of Attorney takes care of your financial affairs, property, money and assets. This means that your chosen person or people can pay your bills and deal with your income when you are unable to.
LPA Health & Welfare
A Health & Welfare LPA allows you to decide who gets to make decisions on your future care and welfare. Unlike the Property and Financial Affairs LPA, this element will only come into force when you’re unable to make decisions. It gives your family a much stronger voice about decisions regarding where you will live, your medical care and life sustaining treatment.
LPAs for businesses
If you are a business owner or a Company Director, it is important to think about what would happen to your business if you were unable to make decisions. Who would authorise the payment of bills, sign cheques, service a business loan or pay salaries if something happens to you? Would you hope that a colleague, a family member or perhaps your Accountant will get authority to act on your behalf? This would take an extremely long time to sort during which your business will potentially be at risk. To protect your business, contact us about a separate Business LPA.
If I do not have LPA, what will happen?
An application will have to be made to the Court of Protection for a Deputyship Order. This will involve:
1. Very long delays
The process takes 9-12 months during which time your accounts are frozen (this may include joint accounts), bills cannot be paid and insurances cannot be renewed.
2. Substantial costs
Many hundred or even thousands of pounds in set up fees. If accounts are frozen, someone else will need to pay on your behalf. There are also ongoing Deputy charges and Court fees.
3. Loss of control
A Judge will make the final decision who is appointed to deal with your affairs. This may not the person you would have chosen. This person is called a Deputy. Your family would have the added stress of dealing with the Deputy every time a decision is required. They would also have no official say in any medical treatment for you even if they knew what your wishes would have been.
If you want your loved ones to care for you and make decisions on your behalf, then you need to ensure you have both Lasting Powers of Attorney in place.