Lasting Powers of Attorney

In simple terms, a Power of Attorney (LPA) is a legal document that allows you to appoint someone you trust, known as your attorney, to make decisions on your behalf should you become unable to do so. There are two different types of LPA, Property and Finance and Health and Welfare. In the majority of cases, LPAs are used when people are ill or lose mental capacity, but not always.

The words ‘Power of Attorney’ can strike fear into the heart of some people, mainly due to horror stories about people taking money from elderly relatives or being forced into signing these types of documents. Attorneys, however, must always act in the best interests of you as the Donor and if you have concerns that they will not do this, they may not be the right person to act as your attorney. There are rules which prevent Attorneys from doing the following: Mix their money with yours, monies must be kept separate, and records kept; Use the position to benefit them personally; Pay themselves a fee (unless you give them permission to); Make big gifts of money to people including themselves.

This is a common misunderstanding made by a lot of people. If you have a joint account with another person and they are not mentally able to make their own decisions, then the account has to be frozen. As a result, you’ll have difficulty accessing your own money, never mind the other person accessing it. It is a commonly held misconception that the responsibility will automatically fall to your next of kin.

Nobody actually knows what the future holds, so a person is never too young to make an LPA. One of the most important points to remember is that a Lasting Power of Attorney can only be created by a person with mental capacity. It is arguably better to have a Lasting Power of Attorney ready in case it is needed rather than waiting until you need somebody to deal with your finances and finding it is too late.

If you suddenly become unable to manage your own affairs, without an LPA, an application may have to be made to Court of Protection. This can take over a year and cost thousands. During this time your finances will likely be frozen which can cause serious hardship to you and your family.

The person who is then authorised to handle your affairs on your behalf, who may not be someone you would have chosen, and may even be a Court Official, who will then charge every time they act for you. Drawing up an LPA would have proven to be the much less expensive option.

There is often confusion behind the roles of people appointed in Wills, known as Executors, and those appointed in an LPAs, known as Attorneys. To be clear, an Executor’s duties start when a person dies, whereas an Attorney’s duties finish on a person’s death and are used during your lifetime when you might struggle to get out of the house as much and or make decisions for yourself.