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What if I am unable to manage my own affairs?
We all know that we should write a will, but too few know of prepare a lasting power of attorney. By 2025, it is expected that more than 1 million people in the UK will have dementia, according to the Alzheimer's Society. One in five people over 85 already suffers from it, with rates significantly higher among women than men. Handling your financial affairs becomes virtually impossible – which is why charities who care for the elderly strongly recommend everyone plan ahead to ease the burden on relatives.
A registered lasting power of attorney (LPA) gives another individual the legal authority to look after specific aspects of your financial affairs or health and welfare should you lose the capacity to do so. It's not just for the elderly, younger people may become incapacitated through accident or illness.
If you do not have an LPA in place and later become mentally incapacitated, relatives face long delays and expense in applying to the court of protection to get access and take control of your assets, finances and make welfare decisions for you.
LPAs are designed to be recognised by financial institutions, care homes and local authorities, as well as tax, benefits and pension authorities. They are legal documents introduced in October 2007, replacing the previous system of enduring powers of attorney (EPA) – although an EPA created before October 2007 remains valid.
There are two types of LPA: one that can cover decisions about money matters, known as a property and financial affairs LPA, and one that can cover decisions about healthcare, known as a personal welfare LPA. A key difference is that a property and financial affairs LPA can be used while someone still has capacity, whereas a personal welfare LPA can only be used once they have lost it capacity.
An appointed attorney for a property and financial affairs LPA can make decisions on things such as buying and selling your property, dealing with your bills, running your bank accounts and investing your money. If you have a personal welfare LPA, your attorney can generally make decisions about where you should live, how you should be treated medically, what you wear, what you should eat and even who you should have contact with.
You may choose anyone you trust as your attorney, provided they are over 18, and they are willing to take on the role, which is a serious responsibility. It is their duty to make all decisions in your best interests and they must follow certain principles set out in the Mental Capacity Act aimed at making sure you are encouraged to make your own decisions where possible.
What if you lost the ability
to make decisions ?
The loss of capacity both mental or physical can make it difficult to manage your own affairs. Without appointing somebody as an attorney there is no guarantee that the correct decisions will be made regarding your financial or health matters.
Lasting Power of Attorney
How important are they?
Just 246,000 Lasting Powers of Attorney were registered in 2013
850,000 people are living with dementia in 2015
An estimated 1 million people will suffer from dementia in 2025
Without a registered LPA all assets are frozen.
An application to the court of protection will have to be made for a deputyship order which takes months.
A Deputy is a person appointed by the court to take control of a persons affairs when they lack capacity.
No assets can be disposed of, bank accounts are frozen, decisions about health and welfare cannot be made.
Family decisions where a person who lacks capacity shall live is not automatic.
There is no guarantee the deputy will be a family member.
There would be a court application and ongoing supervision fees.
If a person needs care, the council can apply for deputyship order.
Family may not have the power to make decisions about healthcare
A lasting power of attorney for
health &welfare covers decisions relating
to social and healthcare needs which
can include where the you live, how you are
cared for and what healthcare you receive.
These Powers are only applicable to England and Wales. If you would like more information please contact us
APR Legal and Financial Planning Trinity house 114 Northenden Road Sale Moor M33 3HD
firstname.lastname@example.org 01625 667967