Gita Kapoor from the legal firm Charles Coleman shares why setting up a Lasting Power of Attorney is essential for protecting you and your loved ones.

What is a Lasting Powers of Attorney?

A Lasting Power of Attorney, also known as an LPA, is an important document that allows you to appoint someone – referred to as an attorney - to help you make decisions, or to make decisions on your behalf if you are no longer able to do so.

An LPA is different from your Will, which specifies what will happen to your assets after you pass away. An LPA is there to help manage your affairs and assets while you are alive.

There are two types of LPAs.

Property and Financial Affairs LPA

This allows your attorney(s) to make decisions about your finances, such as managing bank accounts, paying bills or selling property. This type of LPA can be used with your permission as well as if you lack the mental capacity to make decisions.

Health and Welfare LPA

This allows your attorney(s) to make decisions about your health and care, including medical treatment and where you live. This type of LPA only comes into effect if you are mentally incapable of making these decisions yourself.

Creating an LPA is something that everyone should consider, especially as they get older or if their health starts to decline. Managing your affairs can become more challenging as you get older and having an LPA in place ensures your loved ones can step in to help you when needed. It is particularly important if you are diagnosed with a medical condition that could impair your ability to make decisions, such as dementia.

Things to consider

1.     Who you want to appoint as your attorney - select trusted individuals to act on your behalf. You can appoint more than one person, but it’s important that you choose someone who is reliable and will respect your wishes. Often people appoint their spouses, children or friends as their attorneys.

2.     Decide what powers to grant - you can specify the types of decisions you want your attorney to make, whether that’s financial decisions, medical decisions, or both.

3.     Decide whether to include any preferences or instructions – whilst it’s important to maintain flexibility, you can include your wishes in the powers themselves to help guide or instruct your attorneys.

How do Lasting Powers of Attorney work

You can create LPAs yourself or instruct a solicitor to prepare them for you. The LPAs need to be signed by the person creating the LPA (the donor), the attorneys, any replacement attorneys and an independent certificate provider. The certificate provider’s role is to confirm both that the donor understands what they are signing and its effect, and that they are not being forced into entering into it.

Once the LPA has been signed by all parties, it needs to be sent to the Office of the Public Guardian (OPG) for registration. There is a registration fee of £82 per LPA.

Once the LPAs have been registered with the OPG, they are ready to be used when needed. You may wish to store the original copies securely with your solicitor until then. The OPG will also send you instructions on how to create an online account where the LPAs can be accessed online.

If the situation arises where the LPA needs to be used, then you or your attorneys can provide the original LPA, a certified copy of the LPA, or an online code to an institution e.g. to a bank or hospital, to show authority of your attorney’s right to act.

Common misconceptions 

Despite its importance, there are many misconceptions about LPAs that can lead to confusion. Here are some of the most common misconceptions we come across:

"I don’t need an LPA; my family will be able to manage my affairs anyway” 

Many people assume that their next of kin can automatically manage their affairs if they become incapacitated. However, unless an LPA is in place, your family will not have the legal authority to do so. This can lead to costly and time-consuming legal processes, as if there is no LPA in place they may need to apply to the court to obtain permission to act for you and deal with your money or property.

“Once I set up an LPA, it’s final and cannot be changed” 

This is not true; you can revoke or make a new LPA at any time as long as you are still mentally capable. As with a will, it’s important to review your LPA regularly to ensure it continues to reflect your wishes.

“I have made a Will so I don’t need an LPA” 

An LPA and a Will are two completely separate legal documents. A Will takes effect after your death, determining who gets your assets. In contrast, an LPA is used while you are alive, ensuring that someone you trust can manage your affairs during your lifetime if you do not have the mental capacity to do so yourself, or if you need assistance.

“I don’t need an LPA until I’m older” 

While many people think LPAs are only for older individuals, it’s wise to set one up much earlier. You must have the required mental capacity to make an LPA, so it is important not to leave it too late. Health can change unexpectedly, and having an LPA in place can avoid complications in case of sudden illness or injury.

"If I make an LPA, I will lose control over my affairs” Some clients have concerns that making an LPA means they are giving away their rights to act for themselves. It is important to note that your attorneys are only able to act with your permission or if you are deemed to have lost mental capacity to make decisions. They must also always act in your best interests and are governed by the law of the Mental Capacity Act.

Case studies

Case Study 1: planning ahead for health issues

Sarah was diagnosed with early-onset dementia. Sarah had always been very independent and had always been in control of her finances and medical decisions, but as her condition began to progress, she realised that her ability to make decisions would soon diminish. Sarah didn’t want to leave the decision of her care to the local authority and wanted to receive care in her own home wherever possible. Sarah had a trusted friend, Emma, whom she appointed as her attorney. When Sarah was no longer able to make decisions on her own, Emma was able to step in and ensure that Sarah’s care reflected her wishes, including arranging her care at home and settling all necessary bills from Sarah’s savings.

Case Study 2: protection after sudden injury

John was involved in a serious car accident that left him in a critical condition for several months. John had always managed the money side of things, and all direct debits came from his sole bank account. Luckily, John and his wife, Lisa, had created LPAs a few years ago. Lisa was able to step in immediately and access John’s bank account to continue paying the household expenses. Lisa was also able to make medical decisions on John’s behalf and consent to treatment as his health attorney.

A Lasting Power of Attorney is an essential document for ensuring that your affairs are managed according to your wishes if you need help in the future or are no longer able to make decisions for yourself.

Having an LPA in place offers peace of mind and ensures that the right person is in control when you need them most. It also avoids the need for costly court applications at a stressful time when matters are urgent.

If you or a friend/family member are looking to prepare a Lasting Powers of Attorney and would like assistance, the Private Client Team and Charles Coleman would be delighted to assist.