What is a Lasting Power of Attorney (LPA)
Lasting Powers of Attorney (LPA) is a document which allows you to nominate a person or persons to manage your affairs during your lifetime. Your Attorneys can use the LPA to handle your affairs once you lose capacity and under certain circumstances an LPA may be used before you lose capacity. It may also be possible for your LPA to be used abroad to manage foreign assets.
Capacity
LPAs are often associated with loss of capacity due to degenerative diseases such as Alzheimer’s. Although medical advances are allowing us to live longer, sadly this means we are all potentially vulnerable to living through the general decline in mental ability (dementia). However, the loss of capacity may also be brought on by a various number of unpredictable life events such as brain injury, stroke, mental health episode, or a physical accident or decline in health which later affects one’s mental ability to manage their day-to-day affairs.
Keeping track of bills, investments or even making medical decisions can soon become difficult tasks once a person has lost capacity.
Do young people need LPAs
Let’s face it, life is full of surprises, and no one is exempt from the unexpected. Capacity can be lost in various ways at younger age. Some instances in which capacity can affected:
- Extreme and Adventure sports accidents:
It perhaps comes as no surprise that more injuries and fatalities are incurred during extreme sports than traditional sports. Adventure sports in turn may not be as dangerous, however they also carry risks of injuries which could potentially affect brain capacity. A knock to the head may be all it takes!
- Strokes:
According to the Stutter Health, ‘about 10 to 15 percent of strokes occur in children and adults under age 45, and that number is rising.’ Strokes often cause significate damage to the brain and can onset vascular dementia.
- Unexpected illness:
The COVID19 pandemic impaired many people’s physical capacity and for some individuals there have been lasting mental capacity effects. According to the Office of the National Statistics (ONS), ‘an estimated 2.1 million people living in private households in the UK (3.3% of the population) were experiencing self-reported long-COVID as of 1 October 2022’ with the demographic being aged between 35 to 69 years. The COVID19 pandemic and its effects has highlighted now more than ever that one can lose their capacity at any time and at any age.
- Underlying physical and mental Illness:
It is wise to put LPAs in place when a person with underlying physical or mental health illness has capacity. Once the person loses their capacity i.e., once the mental illness becomes harder to manage or self-medicate, the Mental Health Act works in support of their LPA for continuing care.
Types of Lasting Power of Attorney (LPA)
There are two types of LPAs.
- Health and Welfare
- Property and Finance
Health and Welfare LPA
This LPA can be used to make healthcare decisions on your behalf once you have lost capacity. Loss of mental capacity can often be sudden and unpredictable. For this reason, it is important to have a Health and Welfare LPA in place before you lose the capacity to make one.
A Health and Welfare LPA will allow your attorneys to make decisions regarding:
- Your choice and/or location of residential/medical care
- Life sustaining treatment
- Arranging daily care within the home
The Health and Welfare LPA works in conjunction with the Property and Finance LPA as it allows your attorneys to pay for the care arrangements from any existing savings, investments or property.
Property and Finance LPA
Before you lose capacity, you may still require assistance with your finances and day-to-day management of incomes and outgoings. For this reason, this LPA can be used by your attorneys before and after you have lost capacity. The Property and Finances LPA can be used to manage the following:
- Paying bill i.e., utilities
- Purchasing daily essentials such as food and toiletries
- Selling your house (i.e., to pay for residential care)
- Management of investments, stock and hares
- Accessing your pension and benefit payments
- Paying for residential care or home care if needed
It is very important to note that you cannot create an LPA once you have lost capacity. Your spouse or family may be denied access to your finances or any healthcare decisions. If you do not have an LPA and have lost capacity your loved ones may need to apply for a Deputyship Order to manage your affairs. Below is a comparison between the LPAs and Deputyship Orders.
- A LPA allows you to nominate people you feel are most suitable for the job.
- The Court will decide who is suitable for the role of Deputy. You are unlikely to have any direct input in the decision-making process due to lack of capacity.
- A LPA allows you to nominate people you feel are most suitable for the job based on your knowledge of their skills i.e., one child may be more responsible with money than another.
- The Court will scrutinize the finances and character of the person applying to be Deputy.
- LPAs are more cost effective. You pay a single court fee of £82 for each LPA.
- Deputyship Orders are costly as they require more of the Court’s involvement, applications can cost thousands of pounds. For instance, you pay a £371 application fee initially and an additional £494 if the court decides a hearing is required.
- A LPA allows you to appoint loved ones who have intimate knowledge of your wants and needs.
- With a Deputyship Order; if the court deems your loved ones to be unsuitable, they may appoint a professional Deputy i.e., a Solicitor whom you may have never met.
- Your loved ones are often treated as non-professional attorneys, and they can only claim reasonable expenses when acting as under the LPA.
- Professional Deputies are permitted to charge fees for their services.
How to make a Lasting Power of Attorney (LPA)
LPAs are legal documents and for this reason it is recommended that you seek legal advice from a professional to protect you and your finances once you lose capacity. Fusion Law are here to assist you with your LPAs, please contact us on 0203 841 7010 to arrange a meeting with one of our Solicitors.
