Did you know that if you fell ill and weren’t able to make decisions for yourself, your loved ones wouldn’t automatically be able to act on your behalf?
While no-one likes to consider the possibility that there may be a time when you can’t manage your own affairs, it can be important to make a plan just in case.
This is where putting a Lasting Power of Attorney (LPA) in place before this happens can help you. As we’ll discuss later in greater detail, this is a legal document that lets you appoint people to look after your affairs on your behalf when you’re no longer able to.
Despite the benefits that an LPA can offer, a study published in FTAdviser shows that 4 in 5 over-55s do not have one in place. Read on to find out more about what they are, as well as three important reasons why you should put one in place now.
There are several different types of LPA that you can put in place
To put it simply, an LPA allows you to choose someone, or multiple people, to manage your affairs on your behalf if you were ever unable to do so yourself. This could be due to an accident that leaves you physically incapacitated, or due to an illness such as dementia.
You can choose anyone to act as your attorney, as long as they are over the age of 18 and have the mental capacity to make decisions. If you decide to have more than one, you can also choose whether they can act separately or must make decisions together.
One of the most important things to remember when it comes to implementing an LPA is that you can only put one in place while you have the mental capacity to do so. This is why it is often better to do it sooner rather than later, as you don’t know what the future may hold.
There are two main types of LPA that you could consider, and they can each cover a different area of your welfare. These are:
Health and Welfare LPA
This type of LPA would cover aspects of your day-to-day wellbeing. This can include any medical care you may need, your daily routine, as well as potential decisions like whether to move you to a care home.
Property and Financial Affairs LPA
This LPA would cover the management of your assets, such as properties and investments. An attorney’s responsibilities may include jobs like paying bills and claiming benefits on your behalf.
Of course, since each role has its uses, you may want to consider whether you would benefit from only one of the two types of LPA, or both.
Read on to find out three important reasons why you should put an LPA in place now.
1. Gives you a greater amount of control
One of the most important reasons to appoint an attorney is that, since you choose who will act on your behalf, you can retain a sense of control over what may happen. Since you can pick a person that you trust, you’ll be able to relax, knowing they will manage your affairs in the most effective way.
Furthermore, you also have a high degree of control over what your attorney, or attorneys, are allowed to do on your behalf. For example, you may restrict them from making decisions about a particular asset, such as your family home.
That said, it’s also important to bear in mind that an LPA will only trigger when you are incapacitated. At that point, you won’t be able to make any changes to it, so think carefully about the long-term consequences of any restrictions you impose.
2. Helps your loved ones to make decisions faster
Another benefit of having an LPA in place is that it can help your loved ones to manage your affairs without any delays if the worst should ever happen to you.
If you are incapacitated and don’t have an attorney lined up, your family will have to apply to the Court of Protection in order to appoint a deputy. This can potentially be very time-consuming and may potentially take several months.
As you might imagine, this delay could leave your loved ones vulnerable to financial issues while their application is being processed.
It’s also worth noting that LPAs can be highly flexible as you can use them for temporary issues, such as if you are hospitalised after an accident. If you set an LPA up temporarily, you can apply to alter or remove it once you can prove that you have the mental capacity.
3. Can give you greater peace of mind
Without the help of a crystal ball, nobody can predict what the future may hold. However, knowing that you have an LPA in place can give you peace of mind to know that you’ll be able to overcome any issues you may encounter.
Since you can choose who will act on your behalf if you were ever unable to manage your own affairs, you can be confident that they’ll be able to do so effectively.
For example, if you run your own business then you could appoint a co-worker or business partner to look after your share of your business. Since they would be familiar with the kind of challenges that this role could have, you can rest easy knowing that they’ll be able to handle it.
If you want to know more about how you could benefit from having an LPA in place, you may want to seek professional advice. Working with a financial planner can help you to assess your needs and designate an attorney, or attorneys, to look after your affairs if you’re ever unable to.
Get in touch
If you want to protect yourself against the unexpected by putting an LPA in place, we can help. Please email email@example.com or call us on 0117 214 0870.Back to Our Insights