When it comes to planning for the future, many people focus on creating a will to ensure that their assets are distributed according to their wishes. However, there is another essential aspect of estate planning that is often overlooked – setting up lasting powers of attorney (LPA). An LPA is a legal document that allows you to appoint someone you trust to make decisions on your behalf if you are no longer able to do so yourself.
An LPA can cover decisions about your finances, property, health, and welfare. By setting up an LPA while you are still mentally capable, you can have peace of mind knowing that your affairs will be taken care of according to your wishes if you become unable to make decisions due to illness, accident, or old age.
There are two main types of LPAs – one covering property and financial affairs, and the other covering health and welfare decisions. Let’s take a closer look at each type:
1. Property and Financial Affairs LPA: This type of LPA allows you to appoint someone to manage your bank accounts, pay bills, collect income, sell your house, and make decisions about investments on your behalf. You can choose when this LPA comes into effect – either immediately upon registration or only when you lack mental capacity.
2. Health and Welfare LPA: This type of LPA allows you to appoint someone to make decisions about your medical treatment, where you live, and other personal welfare matters if you are unable to do so. This LPA can only be used when you lack mental capacity.
It is important to note that LPAs must be set up while you still have mental capacity. Once you lose mental capacity, it is too late to create an LPA, and your loved ones may have to go through a lengthy and costly process to obtain the legal authority to make decisions on your behalf.
Setting up an LPA involves choosing one or more people to act as your attorneys, specifying the decisions that they are authorized to make, and signing the document in the presence of witnesses. The document must then be registered with the Office of the Public Guardian before it can be used.
Many people are hesitant to set up an LPA because they fear losing control over their affairs or being taken advantage of by their attorneys. However, there are safeguards in place to protect your interests:
– You can choose more than one attorney and specify whether they must make decisions jointly or separately.
– You can include instructions or preferences in the LPA to guide your attorneys in their decision-making.
– You can appoint a replacement attorney in case your original attorney is unable or unwilling to act.
– Your attorneys are required to act in your best interests and follow the principles set out in the Mental Capacity Act 2005.
By setting up an LPA, you can ensure that your wishes are respected and that someone you trust will be able to manage your affairs if you are no longer able to do so. Without an LPA in place, your loved ones may face complications and uncertainties when trying to make decisions on your behalf.
It is never too early to set up an LPA. Accidents and illnesses can happen unexpectedly, and having an LPA in place can provide you and your loved ones with peace of mind knowing that your affairs will be handled according to your wishes.
In conclusion, lasting powers of attorney are an essential aspect of estate planning that should not be overlooked. By setting up an LPA, you can ensure that your affairs are taken care of according to your wishes if you are no longer able to make decisions yourself. Planning ahead and setting up an LPA can provide you and your loved ones with peace of mind and security for the future.