Lasting Power of Attorney - Should I get a power of attorney or is it a waste of time?

Is it worth having a lasting power of attorney in the UK?

Writing a will to secure your assets in the event of your death is a must, but it can be equally as important to set up a lasting power of attorney (LPA) to ensure that your finances are managed with your best interests at heart while you’re still alive.

Let’s say, for example, you’re 80 years old, fit, healthy and independent. You have £10,000 in savings but no life insurance and have made a will to pass all of your assets on to your son. Do you still need an LPA? Yes; because a will only impacts your estate once you pass away, so it’s crucial that you set up a lasting power of attorney to make sure your finances will be handled correctly if ever you lack the mental capacity to make important decisions yourself.

It’s easy to delay setting up a lasting power of attorney and many people deny the importance of having one, particularly because no one likes the thought of being unable to manage their own affairs. Unfortunately, as we get older, we become more likely to need help with everything from our finances to our every-day care, which is why an LPA can be critical in maintaining a good quality of life.

Martin Lewis, OBE and founder of Money Saving Expert has previously said "Lasting Power of Attorney — it’s incredibly important" and that with a professionally prepared LPA "You stay in control". Martin Lewis has also published many articles and videos about the importance of a Lasting Power of Attorney online for further information.

Before setting up an LPA, it’s worth knowing a bit about how it works and the various benefits that come with it, as explained below.

What is a lasting power of attorney?

The power of attorney gives someone the legal right to handle another person’s individual’s affairs, such as their finances and healthcare. To grant this authority, a lasting power of attorney must be set up, which is a legal document that allows an individual to choose one or more people to become their ‘attorneys’. The role of an attorney has a wide range of responsibilities, as we’ll outline later in this article.

There are two main types of lasting power of attorneys: 

• Health and Welfare LPA
• Property and Financial Affairs LPA 

The former gives attorneys the right to make decisions regarding the donor’s healthcare, housing, and other every-day affairs, while the latter refers to the handling of finances such as pensions, bills, insurance policies, tax, bank accounts, and so on.

In England and Wales, you can choose to set up either one or both of these LPAs, and they can be either temporary or permanent.

Here at Wills Services, our trained advisors are available to help you determine which type of lasting power of attorney best suits your individual circumstances before beginning the process. Simply Contact Us and see how we can help you.

You can set up an LPA as long as you are over 18 years old and are currently of sound mind to make your own decisions, but it becomes increasingly important to have one in place as you get older, before it’s too late.

Remember, if you lose mental capacity without an LPA in place, an individual would need to apply to the Court of Protection to be appointed as a ‘deputy’ so that they can manage your assets, which is often a far more expensive and time consuming process than setting up a legally binding LPA beforehand.

You might also be interested in reading: What gifts can appointed attorneys make under an LPA?

What are the benefits of having a lasting power of attorney?

• Maintain control of your affairs - With an LPA, you retain an element of control over your finances and other important every-day matters as you know the attorney will have your best interests at heart. You can also provide preferences or guidance as to how you’d like your affairs to be managed (for example, a list of circumstances under which your home can be sold). 
• Save money - Setting up an LPA is a relatively affordable process, especially in comparison to the application to become a ‘deputy’ (which would need to be done if you didn’t have an attorney in place).
• Avoid delay - The LPA is valid as soon as it’s registered and can be used immediately, without delay, even if you are of sound mind (as long as you give your consent). 
• Peace of mind - You can rest easy knowing that should old age or illness lead to you being unable to make your own important decisions, your attorney will do so on your behalf with your preferences in mind.

You might like: What is a replacement attorney and when would you need it?

Responsibilities of an attorney

Once an official LPA is in place, the roles and responsibilities of an attorney are vast, which is why some people feel it is necessary to opt for more than one to cover certain elements. For example, you could choose a solicitor as an attorney to manage your finances and a family member to handle your healthcare and every-day life.

Before choosing a Property and Financial Affairs attorney, ask yourself: 

• Does this person handle their own finances well?
• Do they have time to manage my money?
• Can I trust them to make decisions based on my best interests?

When you choose a professional solicitor as your attorney, you can guarantee that the answer to all three of those questions will be ‘yes’.

To start the process of setting up an LPA or simply for a chat about the options available to you, Submit your Lasting Power of Attorney enquiry here.

 

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