We take our Mental Capacity for granted
I have a will, why do I need an LPA?
Most adults know that they should write a will to deal with their affairs if they pass away, but there is a lack of awareness about what would happen if they were to lose capacity during their lifetime without the appropriate planning in place. While a will is important to look after loved ones a person leaves behind, the decisions to be made when a person loses capacity will directly affect their own lifestyle and wellbeing. For this reason, planning for this eventuality should be a high priority.
What is an LPA?
There are two types of LPA: a Property and Financial Affairs LPA and a Health and Welfare LPA. The Property and Financial Affairs LPA gives attorneys the authority to look after the donor’s finances – including buying and selling property, dealing with bills, running bank accounts and investing money. The Health and Welfare LPA allows attorneys to make decisions about medical treatment, or day to day care, on behalf of the donor in the event that they become unable to make those decisions themselves.
What would happen to my business?
Business owners can also create separate LPAs for their business interests allowing them to appoint specific attorneys to look after their business affairs. This prevents personal attorneys exposing both themselves, and the business in question, to unnecessary risk.
Couldn't my Financial Adviser just carry on managing my financial assets, and arranging my income from pensions?
A person’s loss of capacity can also have a direct impact on the ongoing relationship that you have with professional advisers. If you lost capacity without an LPA in place, the Court of Protection would have to make an order specifying who can access and manage the your assets, and more often than not these orders are granted to social services.
There is no guarantee that the person appointed, or indeed social services, would have either the power or the inclination to continue to use the services of your professional advisers. With a valid LPA, however, you can specify that you would like your attorney to consult with your adviser and continue to use their services.
When is the right time to make LPAs?
You must have capacity when you set up your LPAs, so the answer to that question is now, because you do not have a crystal ball.
