Increasing numbers of people are now setting up a Lasting Power of Attorney (LPA), not just those in later life.
A lasting power of attorney (LPA) is a legal document that lets you appoint one or more people (your ‘attorneys’) to help you make decisions or to make decisions on your behalf. This gives you more control over what happens to you if you have an accident or an illness and cannot make your own decisions (you ‘lack mental capacity’). It also ensures that your loved ones won’t have to apply via the courts to manage your affairs on your behalf, which can be long, costly and stressful.
LPAs were introduced in October 2007, to replace the previous system of Enduring Powers of Attorney (EPAs). If you had arranged an EPA prior to this date it may still be valid. Find out more about EPAs here.
Data from the Office for National Statistics revealed that during 2015-16 around 726,000 established Lasting Powers of Attorney, up 180% in the past 5 years. (source)
The growing use of LPAs isn’t surprising given the ageing population, but it is a mistake to think that they are just for the elderly or those in failing health. Accident or illness can occur at any time of life, and the reassurance of an LPA means that your affairs will be taken care of by someone you know and trust.
What are Lasting Powers of Attorney?
In England and Wales there are two types of LPA: one covering health and welfare, the other for property and financial affairs. You can set up either or both types, but for LPAs to be legally valid they must be signed, witnessed and registered with the Office of the Public Guardian.
The health and welfare lasting power of attorney enables your nominee to make decisions about your medical care, moving into a care home, life-sustaining treatment and also regarding your daily routine should you be incapable of making decisions yourself.
The property and financial affairs lasting power of attorney provides for all financial matters including managing your bank accounts and investments, paying bills and the sale of property.
In Scotland, Powers of Attorney are slightly different in that there are three Powers of Attorney: one for financial matters, called a continuing Power of Attorney; one for personal welfare, a welfare Power of Attorney; and a combined POA that covers both continuing and welfare, which is the most common. For more details, see the Office of the Public Guardian (Scotland).
Who can be an attorney?
When you choose an ‘attorney’ you can pick a spouse, partner, relative or friend, or even a professional such as a local solicitor, although remember that they are likely to charge for this service. An attorney must be over 18 and mentally capable of making decisions for themselves. Bankrupt individuals cannot be appointed for financial LPAs. The key consideration is that your attorney should be acting in your best interests in every decision they make on your behalf.
You don’t need substantial assets to benefit. At the simplest level, an LPA can allow your designated attorney to access your bank account and ensure that bills get paid. However, you have to give express permission, before an attorney can use the powers granted under a property and financial LPA, or be deemed mentally incapable of making such decisions.
You may set up an LPA and never need it, but should your health fail it can provide peace of mind that a trusted friend or relative would look after your affairs.