10 reasons why a Lasting Power of Attorney is important for people of all ages
1. As we live longer lives, incapacity issues will continue to increase.
Due to advancements in medicine, the average life expectancy in the UK is on the increase.
However, with increasing life expectancy comes an increase in the number of cases of dementia. According to the Alzheimer’s Society, by 2025 more than 1 million people in the UK will have dementia.
As with any mentally debilitating illness, it can become difficult to manage your own affairs. Making a Lasting Power of Attorney (LPA) while you can, puts you back in control.
2. Accidents happen to the young and the old.
Mental capacity is not just an issue for the elderly. We all think that we are indestructible and that death and illness come later in life. In reality accidents are unpredictable and can happen at any time in your life. An accident may result in losing your capacity or being unable to deal with your affairs.
If you have taken the precautionary step of putting in place Lasting Powers of Attorney, then your family will be able to make important decisions on your behalf. If not, then those closest to you may have to apply to court to appoint someone to manage your affairs which will be more costly and time consuming.
3. Making a Lasting Power of Attorney puts you in control.
The assumption is that if you lose capacity, you lose control. However, what if you have already foreseen the risk of such an event and taken control of your affairs? By deciding who you wish to appoint to deal with your financial and health affairs you have the control to ensure that the people you want to manage your affairs, do so.
Here is a video explaining about a Lasting Power of Attorney.
4. Lasting Powers of Attorney pack a punch.
A Lasting Power of Attorney gives an attorney the legal authority to manage a person’s property and financial affairs and decisions regarding their health and welfare. These documents are designed to be recognised and accepted by all financial institutions and medical practitioners within England and Wales.
Provided that the document is registered with the Office of the Public Guardian, an organisation receiving a Lasting Power of Attorney from an attorney should accept it as the attorney’s authority to act in relation to the person’s affairs.
5. A Lasting Power of Attorney protects your interests.
What better way to protect your interests than making sure that you decide who has the authority to deal with your financial affairs. If you do not make a Lasting Power of Attorney, then someone who you would not want to make decisions on your behalf could apply to the court of protection to become your deputy.
Whilst the court will make every effort to ensure it appoints the right person, this may differ with your view. Lasting Powers of Attorney remove that element of risk.
6. Lasting Powers of Attorney come with checks and balances.
Just because you appoint someone as your attorney, does not give them the authority to do whatever they want with your affairs. An attorney is under a duty to act in accordance with the Mental Capacity Act 2005.
If there are concerns regarding the conduct of an attorney, this should be reported to the Office of the Public Guardian who will investigate further and ultimately can remove an attorney if necessary.
Whilst an attorney has the same powers as you when dealing with your affairs, they have to act in your best interests and there are restrictions on the decisions that they can make, to protect you from financial harm.
7. Lasting Powers of Attorney are an insurance against a life changing event.
We do not think twice about insuring all of the things that matter to us the most, such as homes, cars, holidays and other valuable possessions to ensure financial protection.
Lasting Powers of Attorney should be considered in a similar light. We hope that they will never need to be used; however, should the worst happen, they are there ready to be used when you and your family need them the most.
8. Lasting Powers of Attorney are not just for your bank accounts, they can also help with your business decisions.
Lasting Powers of Attorney can also be made as part of succession planning for your business interests. It is possible to make a property and financial affairs Lasting Power of Attorney in relation to your personal assets and a separate document in relation to your business assets.
This will help to safeguard provisions that are in place so your business continues with minimum disruption. Legal advice should always be taken when considering the appropriateness of Lasting Powers of Attorney for business interests and the best person(s) to appoint.
9. Deputyship applications are more expensive than making a Lasting Power of Attorney.
There is a registration fee for a power of attorney.
You could expect to spend in the region of £1,500 to £3,000 for a deputyship application to cover professional fees and court costs of £400 plus potential ongoing costs on an annual basis. Making Lasting Powers of Attorney will invariably be cheaper than this.
10. It is quite satisfying to get everything organised and in order.
We all like ticking things off a list. Make Lasting Powers of Attorney the next thing you tick off. You can then store them safely and carry on with life with the peace of mind that you have put your financial and health affairs in order should the worse happen and you can no longer make important decisions yourself.
About the author
This content was first published by Susan Glenholme, the Managing Partner for Debenhams Ottoway.
As well as being managing partner and head of the private wealth team, Susan is recognised by Chambers and Partners UK legal directory, features in the legal 500, as one of the leading private client lawyers in the UK.
Susan can be contacted on 01727 735 636.