Lasting Power of Attorneys (LPA)

One in three over-65s develop dementia. Yet don’t assume relatives can just walk into a bank and access your money, even if it is to pay for your care.

Unless you’ve a Power of Attorney already, loved ones need to apply through court, which can be long and costly. This guide shows you how to sort it out in advance.

What is Lasting Power of Attorney?

Thinking and talking about what would happen if our faculties deserted us is uncomfortable. Yet it’s important to consider how much worse the situation would be if you had a stroke, serious accident or dementia (eg, Alzheimer’s) without sorting it out first.

If someone has difficulties that mean they can’t make decisions anymore, they will need help managing their finances. Lasting Power of Attorney (LPA) is a legal document where someone (while they still have mental capacity) nominates a trusted friend or relative to look after their affairs if they lost capacity. The key point to remember…

Don’t think you suddenly give up control. You can choose whether it can be used either before, or only when, you lose mental capacity.

Your representative should only ever make a choice for you if you’re unable to make that specific decision at the time it needs to be made. For example, if you fall into a coma, your representative would start looking after your affairs. Yet if you wake from the coma, you should be able make to your own decisions again.

There are two types of LPA: one for Finance and Property and another for Health and Welfare. The processes are similar for both. A key difference though is that the Health and Welfare one can only be used after the person loses capacity – there’s no option to use it before.

LPAs replaced the previous Enduring Power of Attorney (EPA) system. EPAs set up before 1 October 2007 will still be valid, whether or not they have been registered, though they must be registered when the person loses capacity, which costs £82 per document (April 2017).

Why set up a Lasting Power of Attorney?

If you lose mental capacity, unless you’ve already filled in the Power of Attorney forms, your loved ones will need to apply through the Court of Protection to become a ‘deputy’, a long and expensive process. They will also need to submit an annual report explaining all of the decisions that have been made including bank statements etc.

You need to pay an application fee of £480 (inc vat) as well as a £500 fee if a court hearing is needed. There is also an annual supervision fee of £320 for general supervision and other fees depending upon the level of supervision? It can take between 6-9 months before being approved and the deputyship needs to be renewed every year!!!

Instead, you can nominate a trusted friend or relative before you lose capacity, by arranging your own Lasting Power of Attorney (LPA) and avoid this whole restrictive, slow, stressful, costly legal process. 

You can appoint one or more representatives to act for you, and can determine how they work together to make decisions on your behalf. You may be thinking “this doesn’t affect us, we’re perfectly well”. This is a common misunderstanding. The key thing to remember is…

A Health and Welfare Lasting Power of Attorney does not allow your attorney(s) to make decisions about your Property and Financial affairs and vice versa.

You can only set up a Lasting Power of Attorney when you have mental capacity. Once you’ve lost capacity, it’s too late.

Charity Age UK says

There’s no specific age when you should consider making a Power of Attorney. Young people can lose capacity through accidents. But if someone is diagnosed with a condition likely to cause loss of capacity, they may be well advised to think about who they want to make decisions for them when they can no longer do so.

What is mental capacity?

Every day we make decisions about our lives. The ability to make these decisions is called mental capacity. People may not be able to make decisions some or all of the time, perhaps because they have a learning disability, dementia, mental health problem, brain injury or have had a stroke.

It’s important to note that living with a mental health condition (depression, bipolar disorder, schizophrenia, etc), does not mean someone lacks capacity.

When you make a Power of Attorney, a ‘certificate provider’ decides if you’re capable of making that choice. They can be someone you’ve known for two years or a professional, such as a doctor, lawyer or social worker.

Once submitted, it takes up to 8 weeks to register. The power will be effective as soon as the LPA is registered; this means that the attorney will be able to start making decisions straight away, unless they specify otherwise on the application.

REMEMBER;

You can only set up a Lasting Power of Attorney when you have mental capacity. Once you’ve lost capacity, it’s too late.

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