We never know what life has in store for us but how many of us think about what will happen to our financial affairs if we are become unable to manage them ourselves? Lorna Fairbairn, Head of the Private Client Group at DMH Stallard, explains Lasting Powers of Attorney and how they can help you to manage your affairs if you ever become unable to do so for yourself.
If you lose mental capacity through illness, accident or disability, then a Lasting Power of Attorney (LPA) would allow your family and loved ones to care for you and protect your assets. If you don’t make an LPA and lose mental capacity, this can mean a very long, expensive and drawn out process which will involve an application to the Court of Protection in order to investigate whether the relatives are fit to run your affairs going forward.
What is a Lasting Power of Attorney (LPA)?
An LPA is a document that allows you to plan ahead by choosing one or more people (your Attorneys) to act and make decisions on your behalf.
Why make a LPA?
What would happen if you were involved in an accident or suffered a debilitating illness? How would your partner or family deal with your finances and property?
What happens if you don’t make a LPA and you lose mental capacity?
Your partner or other family member will need to apply to the Court of Protection for a Deputy to be appointed. This is a costly and time consuming process.
Why make a LPA now?
If you don’t make an LPA and then you lose mental capacity, you will no longer be able to choose who will be your Attorney. Wouldn’t it be better to decide now and have the document stored safely, just in case you ever need it?
There are two types of LPA:
Property and Financial Affairs
Attorneys can manage your finances and property both when you have mental capacity, and when you lack mental capacity. If you wish, you can choose to restrict this so that they only have power to act when you lose capacity. Your Attorneys can buy and sell property, pay bills, deal with your tax affairs, operate your accounts, and claim benefits on your behalf.
Health and Welfare
Attorneys can only make decisions about your health and welfare when you lack the capacity to make them for yourself. They can make decisions about where you live and they may consent to or refuse medical treatment.