Do you have a Lasting Power of Attorney (LPA) in place? If you don’t, it could leave you in a vulnerable position if you’re unable to make decisions for yourself, such as after an accident or illness.

Losing the mental capacity or ability to make decisions for yourself is something no one likes to think about. However, by taking steps just in case, you can improve your security and wellbeing.

An LPA gives someone you trust the ability to make decisions on your behalf. These decisions could be related to medical treatment or finance to ensure you continue to meet commitments.

Having an LPA in place can provide you with peace of mind and security if you can’t, or don’t want to, make decisions.

4 in 5 over-55s don’t have a Lasting Power of Attorney

An LPA is an important step at any stage in your life. Accidents can happen, so even among younger generations, it can provide valuable security.

However, an LPA is most likely to be used later in life when some illnesses are more common or recovery times may be longer. So, it’s worrying that 80% of over-55s haven’t named an LPA according to a Lloyds Bank survey.

Almost a third said they hadn’t set up an LPA because they believe it’s only put in place if they become ill. This is incorrect.

You must have the mental capacity to decide to name an LPA. So, it’s a step that must be taken before it’s needed. If it’s something you’ve yet to do, you should think about it now.

Without an LPA, your loved ones would need to apply for a deputyship to act on your behalf. This can be more costly and time-consuming than setting up an LPA. As the process can be lengthy, it could mean no one can make decisions for you for some time while you may be vulnerable.

64% of UK adults don’t understand how a Lasting Power of Attorney works. Here’s what you need to know

Another reason that some people aren’t naming an LPA is that they don’t understand how it works. Almost two-thirds of people surveyed couldn’t explain what an attorney can do. So, here are five things you need to know.

1. An LPA can make decisions when you’re unable or unwilling to do so

An LPA will only make decisions on your behalf if you’re unable to, or you decide you’d prefer not to make them. In some cases, the powers an attorney has can be temporary. For example, if you’re ill and recover.

Your named attorney cannot make decisions for you if you still have mental capacity and want to do so.

2. There are three types of LPA

There are two different types of LPA that grant the attorney the ability to make different decisions. You should have both types in place, and you can choose the same person for both or different people for each.

The first type is a health and welfare LPA. This would provide someone with the ability to make decisions relating to your health and care. This could include decisions about moving into a care home, medical treatment, and life-sustaining treatment.

The second is a property and financial affairs LPA. This would allow someone to manage your financial affairs on your behalf, such as paying bills, collecting your pension, or selling property.

The third is a business LPA. This would allow someone to specifically manage your business affairs including director responsibilities, shareholder voting and day to day running of your business.

3. An LPA grants someone the power to make decisions during your life

A quarter of people are unaware of the differences between an LPA and a will.

In essence, an LPA gives someone the ability to make decisions on your behalf during your life. They cannot decide how your assets will be distributed when you pass away. This is what a will is used for – it allows you to set out what you want to happen to your assets when you die.

You should have both a will and LPA in place.

4. You can name more than one LPA

As mentioned above, there are two types of LPA, and you can name different people to fill these roles.

If you want, you can also name multiple LPAs, for instance, your partner and child. You can specify whether they can make decisions independently or must work together.

You should think carefully about who your LPA should be. Speaking to them about whether they’re comfortable with the role and what your wishes would be in various circumstances is important.

5. You should still name an LPA if you’re married

It’s a common misconception that your partner will be able to make decisions for you if you’re married or in a civil partnership. However, this isn’t always the case.

Your partner, for instance, does not have an automatic right to manage your bank account for you, even if it’s a joint account. As a result, naming an LPA, whether this is your partner or someone else, is still an important step.

LPAs should form part of your wider estate plan. LPAs are legal doucments and you should always take professional advice. We are specialists in LPAs and can offer support in creating and registering an LPA, as well as other important areas, such as writing a will. Please email enquiries@strathmorewills.co.uk or call 01708 923 303 to arrange a meeting with us.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate estate planning or will writing.

The post 80% of over-55s don’t have a Lasting Power of Attorney in place. Overlooking this could place you in a vulnerable position appeared first on Strathmore Wills & Estate Planning.