We all know that we should have a Will; but how many of us also have Lasting Power of Attorney, or an LPA, in place? The simple answer is not enough.
An incapacity crisis is looming. Longer lives and an ageing population is fuelling an increase in the number of people living with progressive age-related conditions such as dementia – and it’s increasing quickly.
According to the Alzheimer’s Society, more than one million people in the UK will have dementia by 2025 and this figure is expected to double by 2050. One in five people aged over 85 already have the condition – but don’t be fooled into thinking that this is an elderly person’s problem. In fact, there are currently over 40,000 people aged under 65 (hardly a ripe old age by today’s standards) living with dementia in the UK.
A quick look at the stats shows that there are just over one million LPAs registered in the UK – but over 12.5 million people aged 65 plus. So ask yourself, what provision have you made for your financial affairs, or for your health and welfare, to be dealt with on your behalf?
Let’s start with the basics. What are Lasting Power of Attorney?
Put simply, Lasting Power of Attorney (more commonly known as an LPA) is a way of giving someone you trust (your ‘attorney’) the legal authority to make decisions on your behalf. You can put an LPA in place at any time – provided you have the mental capacity to make such a decision.
An LPA is a legal document. It’s put in place with the help of a solicitor, is relatively inexpensive and can be set up fairly easily alongside your Will. LPAs are designed to be recognised by financial institutions, care homes and local authorities, as well as tax, benefits and pension authorities.
What are the types of LPA?
There are two types of LPA: one covering finances and property, the other dealing with your health and welfare.
You can choose to put in place either or both types of LPA and you can also add specific requests and restrictions which limit the power of your attorney(s).
A property and financial affairs LPA allows someone to make financial decisions on your behalf. It can be used whilst you still have capacity, as well as if you lose capacity. A property and financial affairs attorney can make decisions on financial matters, such as paying your bills, investing money, dealing with your pension and buying or selling property.
They can also use your money to deal with everyday matters, such as buying food.
The attorney is responsible for keeping financial records and must keep your money completely separate to their own – unless you already hold a joint mortgage or bank account with them.
A health and welfare LPA covers important decisions regarding your healthcare. Your attorney will have the power to make decisions on matters such as where you live, your daily routine (including washing, dressing and eating), who you should have contact with and your medical care.
Your attorney may also be able to refuse or consent to medical treatment on your behalf – as long as your LPA states that they have the power to make this decision.
It’s important to note that a health and welfare LPA can only be used once you’ve fully lost the ability to make these decisions for yourself. It can’t be used whilst you’re deemed to have mental capacity.
When should I put Lasting Power of Attorney in place?
It’s a common misconception that LPAs are just for the elderly. Mental and physical incapacity can strike at any time, with young people equally at risk of capacity loss as a result of illness or serious injury.
Remember, once you’ve lost the capacity to make important decisions for yourself, it’s already too late to make an LPA.
We always recommend putting an LPA in place early. You can arrange a Lasting Power of Attorney whilst you’re young and in full health, long before you’re likely to need it and with no intention of triggering it for many years to come – if at all.
I’m worried about elderly relatives – what should I do?
Let’s be honest, old age and finances are taboo subjects. None of us want to face up to our own mortality and it’s easy to put off the ‘big’ topics until crisis point.
It isn’t easy to admit that someone you care about is getting old, or even that you’re noticing your own health beginning to deteriorate. But it’s important to put arrangements in place ahead of time so that the right financial and personal support can be provided as and when it’s needed.
Conversations around LPAs should be seen as positives. Being clear about exactly what you want will empower your loved ones and make the decision-making process easier for everyone. What’s more, planning now for your future – and encouraging your loved ones to do the same – will likely save a lot of time, money and heartache in the long run.
To speak to a member of our LPA team about making an LPA, call our Bristol office on 0117 972 1261 or our Shepton Mallet office on 01749 345 756.
We can help you decide whether an LPA – and which LPA – is right for you. As well as drafting your LPA, we’ll manage the LPA registration process with the Office of the Public Guardian.