This month’s guest blog is written by Katherine Carroll from Peacock & Co Solicitors.
Most people realise that they need to put a Will in place but whilst this sets out how your estate will be dealt with after you die, it is of no use whilst you are still alive.
To ensure you are adequately cared for in your lifetime as you get older, you need a Lasting Power of Attorney (LPA).
What is an LPA?
This is a legal document whereby you appoint someone else (your attorney) to make decisions about your finances, property, money, health or welfare at some point when you might need it. There are two sorts of LPA – one to cover property and finance decisions and one to cover health and welfare decisions. You can put one of them in place, or both – they are separate documents.
Do I need an LPA?
More of us are now living longer but this means we may well suffer poor health in later life, perhaps requiring some form of care, and also help with finances. If you have a stroke or dementia then you might think it is automatic that a family member can assist you, but this isn’t the case – they need legal authority.
When should I put an LPA in place?
The sooner the better! You must have mental capacity to put an LPA in place so it is better not to leave it to the last minute as we can never predict when we may have health problems.
What if I don’t have an LPA and lose mental capacity?
Without an LPA, your family will have to apply to the Court of Protection to gain authority to help you (called a Deputyship). The court decides who will be appointed and this might not be someone you would choose. This can take many months, during which time, your finances cannot be managed. Also, Deputyships are very rarely granted for health decisions, which leaves you vulnerable.
When does an LPA take effect and when should I put one in place?
An LPA only becomes effective when it is registered by the Office of the Public Guardian and activated. As this can take twelve weeks or so, it is better to have it registered as soon as it is signed. It is best not to restrict the LPA with instructions that reduce the flexibility of attorneys in an emergency, for instance if you have a stroke or an accident. As an example, you may never lose mental capacity but you might have physical difficulties where perhaps you can’t sign your name on cheques any longer and therefore need an LPA in place.
Who can I choose as my attorney?
Most people over 18 can be your attorney and they don’t have to be in the UK. It is important to choose someone you trust, which may be a family member, but equally can be a friend or a professional. You can have more than one person, as well as substitutes. They will act as your agent in making decisions about your finances and health; however, they cannot make a Will for you, consent to marriage or divorce, or make large gifts (say for estate planning).
I have an EPA – is this still valid?
Prior to October 2007, we had Enduring Powers of Attorney rather than LPAs. Those created are still valid, although an LPA can be more comprehensive. EPAs don’t cover health decisions, only financial decisions, so if you have one, you might want to consider a health LPA. If you have an EPA, it is worth asking a professional to review it.
Do I need a solicitor to draw up my LPA?
No you don’t – it is possible to make your LPA yourself online. However, they are easy to get wrong and seeing a solicitor who specialises in this area is invaluable. A solicitor can advise on how to make the LPA as flexible as possible, discuss who should be your attorney bearing in mind your family structure, and how to manage complex assets.
If you would like to consider LPAs further, please get in touch.
Katherine Carroll
Peacock & Co Solicitors 020 8035 0387 katherine.carroll@peacock-law.co.uk