cwhen the time comes that you are no longer able to make such decisions yourself.
In the current COVID-19 time we live in, we are naturally forced to think about our financial situation and consider scenarios in which we may need support from those around us.
Though a Will is an important document, it is only applicable upon death. Never before has the need to appoint an attorney been so important.
No one likes to consider a situation where you no longer have complete control of your affairs. However, the truth is that there are many illnesses that can leave us reliant on those around us, whether it be our partners, children, or extended family/friends.
But what is a Lasting Power of Attorney?
A Lasting Powers of Attorney (LPA) is a document that replaced the previous Enduring Power of Attorney (EPA) system. (EPA’s set up before 1 October 2007 are still valid).
There are 2 types of Lasting Power of Attorney:
Property and Financial Affairs
As you might expect, this allows your monetary assets to be dealt with. It gives you the power to appoint a person or persons (an ‘Attorney’) to make decisions, if appropriate, regarding your bank accounts (i.e. opening, closing, using your bank and building society accounts), claiming, receiving and using your benefits, pensions and allowances, paying your household, care and other bills, making or selling investments and indeed buying or selling your home.
Health and Welfare
This covers everything to do with administering healthcare. It essentially enables you to appoint an Attorney to make decisions on your behalf on matters such as refusing or giving consent to life sustaining treatment, staying in your own home and getting help and support from social services, moving into residential care, finding a good care home and perhaps day to day matters such as your diet, dress or daily routine.
It is most important to note however, that your Attorneys can only make decisions if you do not have mental capacity to make those decisions yourself.
What happens if you don’t make Lasting Powers of Attorney?
It’s often assumed that if a person loses their capacity to manage their financial affairs, an immediate family member can simply step in for them. This is not the case (even for a spouse) unless the proper paperwork is in place. If there comes a time in the future when you don’t have the mental capacity to make a particular decision, and you haven’t created a valid LPA (or have an existing EPA), your assets will be effectively frozen and, as you can imagine, this can lead to problems paying bills, claiming pensions, other entitlements and making vital decisions regarding property and investments.
How do I avoid this situation?
It is crucial to set up an LPA while you are still mentally capable, in other words well before you need it. There is very often the misconception that you should only set up an LPA when you are no longer able to deal wit things yourself. This is actually very bad advice.
The most important thing to remember is that you will not lose control of your personal affairs by setting up an LPA. The Mental Capacity Act 2005 ensures that you can choose whether the LPA can be used either before, or only when, you lose mental capacity. It’s a fundamental safeguarding principle of the Mental Capacity Act 2005 that any decision made on behalf of someone who lacks capacity must be made in their best interests. Every adult, whatever their disability, has the right to make their own decisions wherever possible.
For full and informative advice on Lasting Power of Attorney and other areas of Estate Planning, please contact Providence Will Protect on 01925 967191.
All advice is given free of charge!