People today are much more aware of the need to make a Will, so their wishes can be carried out after they die. But as we’re now living longer than ever before there’s the risk that, as we become old, we may not be mentally or physically able to manage our own financial affairs or healthcare.
This is when a Lasting Power of Attorney (LPA) becomes invaluable. It allows a person (the donor) to choose an attorney or attorneys, who will act in the donor’s best interests and in accordance with their wishes, should the need arise during the donor’s lifetime. The attorney is usually a family member, close friend or legal advisor.
Managing wealth and health
There are two types of LPA:
Property and finance This gives the attorney or attorneys the legal authority to act on the donor’s behalf regarding their financial dealings, such as bank accounts, savings, investments and property – including its sale if necessary.
When making a property and finance LPA, the donor can choose whether to give their attorneys legal authority as soon as the LPA is registered, or only when / if the donor loses mental capacity. We recommend that the LPA should take effect immediately. This allows the attorneys to act when the donor is still able to make decisions but is physically unable to carry out everyday financial tasks (such as withdrawing cash) if they’re hospitalised or abroad.
Health and welfare A health and welfare LPA allows attorneys to make decisions about the donor’s healthcare, such as where they should live and courses of medication. If the donor gives them the power, the attorney may also have a say in issues such as life-sustaining treatment.
Donors can use their health and welfare LPA to give attorneys specific instructions for certain medical scenarios. However, most donors choose not to include prescriptive instructions, as they may not cover unforeseen circumstances and could limit the attorney’s power under the LPA. Instead, we encourage donors to write a letter of wishes and discuss it with their attorneys. Be aware, though, that if a medical profession believes an attorney’s decision is not in the donor’s best interests, it can be overridden.
Why an LPA is worthwhile
For many people, an LPA is like an insurance policy. Hopefully you may never need it, but it’s reassuring to know it’s in place and ready to protect you. Without an LPA, should you become unable to make decisions for yourself then your family member, friend or legal advisor would have to apply for a deputyship court order, which can be time-consuming and very costly.
