As we live longer, we’re encountering old-age diseases like Alzheimer’s which means we need to ensure the elderly people in our lives are protected financially, as diseases like this start to affect their mental capacity.
However, the lasting power of attorney isn’t just for the ageing population, it can also be a solution for members of our family who have severe mental health episodes and need to know they and their finances are protected during more testing times throughout their life.
So, what exactly does “Lasting Power of Attorney” mean, why is it important, and how do you know if you should put the legal documentation in place?
What Does Lasting Power of Attorney Mean?
A “Power of Attorney” is a legal document that allows someone you trust, the attorney, to make decisions for you, or act on your behalf, if you are no longer able or if you do not want to make your own decisions any longer. This could be a temporary decision, e.g. if you are in hospital, which would require an ordinary Power of Attorney, or you may need to make long term plans for if you may lose mental capacity in the future, this is when a Lasting Power of Attorney (LPA) is required.
What’s the Legal Definition of “Mental Capacity”?
“Mental capacity” can be defined as the ability to make or communicate specific decisions when they need to be made, and you must still be able to understand this decision, why it needs to be made, and what the outcome will be from your decision.
Who has “mental capacity” and who hasn’t is not always obvious, as some people are able to make simple decisions, but not complex ones, and some find their ability to make decisions changes from day to day. However, any lack is defined as a lack of mental capacity.
What are the different types of Power of Attorney?
Ordinary Power of Attorney:
- covers decisions about your financial affairs
- valid while you have mental capacity
- suitable if you need cover for a temporary period e.g. hospital stay or holiday
- suitable if you find it hard to get out of the house
- suitable if you want someone to act for you in a legal capacity
Lasting Power of Attorney (LPA):
- covers decisions about your property and financial affairs or your health and care
- comes into effect if you lose mental capacity
- suitable if you no longer want to make decisions for yourself
- you would set this up to make sure you are covered in the future
When is Lasting Power of Attorney Necessary?
A Lasting Power of Attorney is a way of giving someone you trust the legal authority to make decisions on your behalf if you lose the mental capacity to do so, or simply if you no longer want to make decisions for yourself.
What are the Different Types of Lasting Power of Attorney?
There are 2 types of Lasting Power of Attorney:
LPA for financial decisions
This can be used while you still have mental capacity, or you can define it so it only comes into force if or when you lose your mental capacity. You can restrict the types of decisions that can be made or allow your attorney to make all decisions on your behalf, and your attorney must keep accounts with your money kept separate from theirs, and a solicitor or family member must check that your money is only being used for what it is intended as stated by you.
This LPA covers things such as:
- buying and selling property
- paying the mortgage
- investing money
- paying bills
- arranging repairs to property
LPA for health and care decisions
This can only be used once you have lost mental capacity, for an attorney to make decisions regarding your health and care.
This LPA covers things such as:
- where you should live
- your medical care
- what you should eat
- who you should have contact with
- what kind of social activities you should take part in
Why is it Important to Put Lasting Power of Attorney in Place?
A Lasting Power of Attorney effectively gives your family pre-permission to get your affairs sorted, and stops vulnerable people from spending irresponsibly or from being prayed on by criminals. Without an LPA in place, your family will have to waste a lot of time and money to get the permission they need in order to handle your legal and financial affairs, which can be very distressing in an already upsetting time, which can lead to a disruption in your quality of care.
Moreover, if you don’t have an LPA, any bank accounts you may share with another person could be restricted or suspended by the bank. This can cause serious problems for the other person named on the account, and whoever needs to deal with your financial affairs, especially if this account is used to pay your bills or your income or pension is paid into this account.
Can Lasting Power of Attorney be revoked?
Yes, you can cancel your LPA at any time, even if the application has already been registered, but you must still have the mental capacity to make that decision yourself. You must tell your attorney/s that this is what you wish to do and inform the Office of the Public Guardian (OPG) so they can remove your LPA from the register.
Your LPA will end automatically if: the attorney dies; you or the attorney becomes bankrupt; a marriage or civil partnership between you and the attorney is ended; and if the attorney develops a lack of mental capacity to make decisions.
If you’re unhappy with the decisions being made by your attorney, you can raise your concerns with the OPG as they possess the responsibility for monitoring attorneys and can investigate any allegations of mistreatment or fraud if that’s what you believe to be happening.
Is Lasting Power of Attorney Valid After Death?
Your Lasting Power of Attorney only remains valid during the period of your lifetime. After death, your attorney must inform the Office of the Public Guardian, sending them a copy of the death certificate along with any copies of the LPA including the original.
If your named attorney dies while you are still alive, the LPA will remain valid as long as there is someone else you trust to be a replacement. If you do not have an immediate replacement you will need to create a new LPA providing you still have the mental capacity to do so. It is often a good idea to have another party who the LPA can defer to.
How do I Put Lasting Power of Attorney in Place?
When you use our legal services, we will guide you through the often-complicated process of putting a Lasting Power of Attorney in place and make it easy and stress-free, so you have peace-of-mind for the future. We have complete knowledge of the latest laws and regulations regarding LPA so we can see to it that your future is secure, without paying any unnecessary legal costs.
If you decide that Lasting Power of Attorney is the logical and best next step for you, we will be there to guide you every step of the way. To find out more about what we do and to contact us, click here.