Who Needs an LPA?

Lasting powers of attorney (LPAs) enable you to grant your chosen attorneys the ability to act on your behalf. However, do you really need one? Read on to see just how an LPA could benefit you!

What Are Lasting Powers of Attorney?

LPAs allow people you select to make decisions on your behalf while you are still alive but lack mental capacity. A lack of mental capacity is defined as the inability to make a decision for yourself. For example, you may be in an accident that renders you unable to make decisions temporarily or develop an illness such as Alzheimer’s, which can affect your decision-making capacity in the long term. 

Needing more time to understand or communicate decisions does not necessarily mean someone lacks mental capacity. In some cases, people may be able to make some decisions for themselves but need help with making others, such as big financial decisions. An LPA grants people you choose and trust to make these decisions for you, giving you greater control over your future. 

There are two types of LPAs:

  • LPA for financial decisions – this type of LPA covers things such as managing property, paying the mortgage, investing, and paying bills. It can come into effect while you still have mental capacity, or you can arrange for it to begin once you lose capacity. You can also restrict what your attorneys can do or give them free rein to make all decisions on your behalf. 
  • LPA for health and care decisions – unlike a financial LPA, an LPA for health and care decisions can only come into effect once you have lost mental capacity. Your attorneys can decide on your medical care, your diet, where you should live, and who you should be able to see. You can also leave instructions to your attorneys about any life-saving treatment you may need to receive. 

You can set up both LPAs, so all aspects of your life are covered by your attorneys. 

Some assume that their spouse or civil partner will automatically be able to make decisions for them if they lose capacity; however, this is not the case. Even with joint assets, your spouse may need your signature to action any changes, and if you don’t have full mental capacity, this won’t be possible. Without an LPA, it can be difficult for your loved ones to manage your affairs properly. 

Who is an LPA For?

LPAs are for everyone, regardless of age or health. It is a common assumption that people won’t ever need an LPA if they establish one – and this may be true. However, accidents or illnesses can happen anytime, and an LPA adds an extra layer of security for you and your loved ones. 

An LPA is right for you if you want:

  • More choice over your decisions – you have full control over who you appoint as your attorneys for an LPA. You can appoint multiple people and have backup attorneys if one or more cannot uphold their duties. You can also leave specific instructions and guidance for them to follow so your wishes are met. Without an LPA, the only alternative is a deputyship order. Anyone can apply to be a deputy, and you will have no say in who the Court of Protection appoints. 
  • To save money for your loved ones – LPAs cost £82 each, so even if you set up both, it will only cost around £164. For deputyship orders, the initial application fee is £385, and more fees could apply if the court decides to hold a hearing. LPAs are the most cost-effective way to prepare for the future and save your loved one’s money. 
  • To save time in the future – registering an LPA takes anywhere from four to sixteen weeks. Although this may sound like a long time, for deputyship orders, your loved ones could be waiting up to six months to hear back. This delay can also occur at a crucial time – a deputyship order is often the last resort when someone has already lost capacity, and no one is authorised to make decisions for them. Critical decisions about health and finance may be required, and the lengthy application process can delay this. An LPA saves valuable time and ensures no delays, and your attorneys can start managing your affairs immediately. 

A key stipulation of an LPA is that it must be created when you still have total mental capacity. If you lose capacity, you won’t be able to create one, and your loved ones may have to deal with the more costly approach of deputyship. 

LPAs vs EPAs

You may have also heard of an enduring power of attorney (EPA). An EPA is an older power of attorney that LPAs replaced in October 2007. If you have an EPA, it is still valid, but your attorneys can only use it for financial decisions. EPAs can no longer be created in the UK, although you can replace your EPA with an LPA, provided you still have mental capacity. 

Ordinary powers of attorney (OPA) are another alternative you may have heard of. However, it is valid for financial decisions only and only when you still have mental capacity. You may set one up if you want someone to manage your affairs temporarily or if you find it hard to get out and want someone to manage your account. LPAs are far more comprehensive and long-lasting compared to OPAs. 

The sooner you create an LPA, the better. Once in place, you have peace of mind that your health and finances will be taken care of by people you trust.

Find out more about registering an LPA with The Planning Bee. Our team of paralegals is here to help you with all your estate planning needs.

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