Lasting Power of Attorney: why it’s like an insurance policy for good decisions
The only danger of arranging a Lasting Power of Attorney is leaving it too late.
Here’s why …
Most people appreciate the benefit of having a Will in place, to deal with their affairs when they die. But there is less awareness about what would happen if they were to lose capacity during their lifetime, without the appropriate planning in place.
While a Will is important to look after your loved ones left behind, the decisions to be made should you lose capacity will directly affect your own lifestyle and wellbeing. That’s why planning for this eventuality should be a high priority.
The Ministry of Justice has recorded a spike in demand for Lasting Power of Attorneys, with over 200,000 submitted in the first three months of this year, as people become more aware of the importance of legal documents which provide security and peace of mind should the worst happen.
No one likes to think about becoming mentally incapacitated due to age, illness or accident. But the fact is that almost every family will face such difficulty in some form, at some stage of their life. And it can happen at any time.
One of the most common causes is a degenerative illness like Alzheimer’s or other forms of dementia. It is estimated that one in three people over 65 will develop dementia.* Then there are accidents and strokes – affecting over 100,000 UK people a year. **
The devastating impact of Covid-19
Recently we’ve seen the devastating impact of Covid-19 – all unexpected events that can leave anyone, at any time, reliant upon life support apparatus in hospitals and unable to make their own decisions about their health, welfare and financial affairs.
That’s why it is in everyone’s best interests to consider a Lasting Power of Attorney (known as an LPA) before the unthinkable occurs.
They’re like an insurance policy which comes into effect if you become unable to make your own decisions during the course of your life.
LPAs allow you to appoint a third party of your choice. This is normally a trusted, close family member(s), called an ‘Attorney’, who will make decisions on your behalf when you are unable to. These decisions relate to:
- your financial affairs and property
- your health and welfare.
The alternative to an LPA is not a good one
If you don’t have an LPA in place and become mentally incapacitated, your loved ones will face long delays and will have to make an onerous application to the Court of Protection for ‘Deputyship’, before any decisions about your health and finances can be made on your behalf.
During this process, your assets are likely to be frozen, including joint assets, and this can cause significant problems for relatives who may need to make arrangements to pay your bills or for any of your ongoing care needs.
What would this mean?
- A long-winded process of up to 12 months during which there is no ability to act on your behalf (even joint bank accounts may have access issues).
- Personal information needs to be compiled, including income and assets.
- The nominated, or Court-appointed, Deputy may only have a limited scope of action.
- It is an expensive process involving solicitors’ fees and other legal costs, application fees, Court of Protection Hearing fees, medical fees for incapacity assessment, assessment of Deputy fee and then annual accounts and other reporting costs for submission to the Office of the Public Guardian for all decisions made.
Arranging an LPA makes life easier for everyone
Here at Parkgate we provide our clients with a holistic approach to financial life planning throughout their lives, and this is now supplemented with a lifetime and later life planning service through the professional provision of, not only Wills and Estate Planning but also, Lasting Power of Attorneys.
This ensures, for instance, that in all of the above circumstances, with valid LPAs in place, Parkgate Financial Services LLP would be able to liaise with your Attorneys to continue to look after your financial affairs and make any necessary changes to help them in their role.
In the UK there is a general lack of awareness or willingness for people to accept that they might need an LPA which, along with the perceived complexity of creating these documents, means that many people neglect to consider this planning until it’s too late.
Please don’t make this mistake as so many others still do.
* Alzheimer’s Society
** State of the Nation Stroke Statistics – February 2018
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Don’t underestimate the importance of having a Lasting Power of Attorney, especially during times like these.
Act now, to ensure someone you trust can act on your behalf should the worst happen.