Lasting Power of Attorney
What is an LPA?
A lasting power of attorney is a legal document that allows you (the ‘donor’) to select one or more people (known as ‘attorneys’) to make decisions on your behalf.
This gives you more control over what happens to you if you have an accident or illness and cannot make your own decisions. There are two types of LPAs:
- Property and Financial Affairs
- Health and Welfare
Property and Financial Affairs gives the attorney power to pay bills, buy and sell property, manage bank accounts and deal with investments. It can be used as soon as it's registered, with your permission.
Health and Welfare grants the attorney the ability to make medical decisions on your behalf. It can only be used when you’re unable to make your own decisions.
Whichever LPA, the attorney must act in the best interest of you when making any decision about your affairs.
Risks of not having an LPA in place:-
If you're married or in a civil partnership, you may have assumed that your spouse would automatically be able to deal with your bank account and pensions, and make decisions about your healthcare, if you lose the ability to do so. This is not the case. Without an LPA, they won’t have the authority.
Without an LPA, loan agreements will become null and void where individuals lose capacity. This includes equity release mortgages. If an individual has a drawdown arrangement in place with their lifetime mortgage lender, allowing for monthly amounts to be paid by the lender, this will stop if the individual loses mental capacity and there is no LPA in place.
If someone becomes incapacitated without a LPA then the partner or children will need to apply to the court of protection to become a ‘Court of Protection deputy’. These applications can take up to 12 months to be assessed, with typical initial fees of circa £1,500, plus there will be annual costs.
LPA's can often be made at the same time as you make your will, or it can be added at a later date.
Lasting Power of Attorney is not regulated by the Financial Conduct Authority.