Why Would I Need an LPA?

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?

A Lasting Power of Attorney (LPA) allows an individual to appoint a third party to make decisions on their behalf when they no longer have the capacity to do so themselves. If a person doesn’t have LPAs in place and they become mentally incapacitated, their loved ones can face long delays and an onerous application to the Court of Protection to gain access to their finances and make decisions on their behalf. During this process, assets are likely to be frozen, including joint assets, and this can cause significant problems for relatives who may need to make arrangements to pay bills or pay for any ongoing care needs. 

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.

lpa-blog-image

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.

"I feel so much better knowing that my son can now help me with my banking and other matters. It was stressful knowing that I could no longer cope."

Share Post