A will deals with matters in the event of your death, but what if you became unable to handle your affairs while still alive?
As you get older, a physical or mental illness could affect your ability to manage personal affairs. If the prospect of this worries you, you should consider setting up a Lasting Power of Attorney (LPA). This is a legal document which allows you to appoint one or more people to either help you make legal decisions, or make them entirely on your behalf.
Knowing that your financial affairs will be looked after by people you trust can give you valuable peace of mind.
Types of cover
There are a number of different types of LPA available depending on the requirement:
1. Ordinary POA
2. Lasting POA
3. Enduring POA (replaced by LPAs on 1 October 2007, but still valid if you signed one before this date)
Ordinary Power of Attorney can be used while you still have the mental capacity to make your own decisions, but need temporary assistance. For example, if you are hospitalised or on holiday and you want to empower someone to make financial transactions on your behalf.
Lasting Power of Attorney is required if you want to give someone the legal authority to make decisions on your behalf in the event you lose mental capacity. There are two types of LPA:
1. Health and Welfare LPA – your appointed ‘attorneys’ will be able to act on your behalf if you become completely unable to make decisions regarding your own wellbeing. For example, if your circumstances mean you require full time care, or a particular medical treatment they will step in and act in your interests.
2. Property and Financial Affairs LPA – your attorneys can make decisions concerning your bank accounts, paying bills or even selling your home if required. Unlike the Health and Welfare LPA, this version can be used as soon as it is registered, but only with your permission – ie. you are still fit to make other decisions on your affairs.
Choosing your attorneys
When deciding who you would like as your attorneys, there are a few things to consider:
- How well do you know them?
- How well do they look after their own affairs?
- Do you trust them to make decisions that are best for you?
- Will they be comfortable making these decisions?
If you choose more than one attorney, you’ll also need to decide whether they will make decisions separately or together.
When you set up your LPA you can nominate replacement attorneys in case your chosen attorneys become unable to carry out the role for whatever reason.
Lasting Powers of Attorney are not part of the Openwork Limited offering and are offered in our own right. Openwork Limited accepts no responsibility for this aspect of our business.
Lasting Power of Attorney is not regulated by the Financial Conduct Authority.
If you would like any assistance in deciding whether an LPA would be suitable for you, or any help setting up an LPA, please get in touch.