Lasting Power of Attorney – Do you need one?
A Lasting Power of Attorney (LPA) is a legal document in which you appoint a person, or a number of people, whom you trust to act as your ‘Attorneys’ to help you manage your affairs. Once the LPA is registered, Attorneys will have the power to ‘step into your shoes’ and make decisions on your behalf if you are unable to make them yourself. There are two types of LPA, one in respect of your property and financial affairs and one in respect of your health and welfare. It is not mandatory to prepare both types but doing so could prove vital to you in the future.
Here we have outlined some of the commonly held beliefs that should be considered when thinking about whether or not to have an LPA:
We are married so I can deal with my husband/wife’s finances if anything happens to them.
This is false – marriage has no impact and monies and property held by a person can only be dealt with by that person (unless an Attorney is appointed under a Property and Financial Affairs LPA).
We have joint accounts so the other person can deal with things.
Joint accounts operate on the basis that both account holders have mental capacity to exercise control over the account. If one account holder becomes mentally incapable of dealing with their finances, you are under a duty to notify the bank about this and they will then likely freeze the account.
I don’t own a property so I don’t need one.
An LPA can be used to help you manage all of your financial affairs including bank accounts, savings accounts, investments, benefits and pensions.
I don’t need an LPA now and I can just prepare one in the future if I lose mental capacity.
An LPA can only be prepared by a person who has mental capacity. If capacity is lost an LPA can no longer be put in place and a relative would need to apply to the Court of Protection to become that persons Deputy. This process is lengthy and expensive.
I’ve got a Will and that deals with everything.
A Will has no legal effect until death occurs. An LPA allows your Attorneys to deal with your finances during your lifetime.