There are two major misconceptions surrounding Lasting Powers of Attorney (LPA):
1) They are only for the elderly;
2) They are only made when an elderly person is beginning to lose capacity.
The first is wrong. The second, wrong and dangerous. Anyone can be subject to mental incapacity at anytime, for example, due to an accident.
LPA’s can, and should, be made by anyone aged over 18 who has the mental capacity to do so (in plain English, understands what they are signing) and this is why:
1) They are wide ranging:
There are two types of Lasting Power of Attorney
One for finance and property, one for health and welfare. If you’ve already made an Enduring Power of Attorney (EPA), this is limited to financial and property matters only. It may also be out of date by now.
You can even make a separate financial LPA to cover your business if you want to.
2) They give you the choice:
You get to decide who can act on your behalf and how they must act, for example together at all times or with authority for just one attorney to act if others cannot. You can appoint backs-ups and are free to appoint different attorneys for finance and health matters, or business matters. The choice is yours!
You can also leave a note of any wishes you would like to be followed (for example on investments or on a choice of care home) or if you want, instructions which must be followed by your Attorneys.
3) They are flexible:
The Powers given by an LPA last until you cancel it or die. They can be used while you are mentally capable (in which case your attorneys must do as you tell them) – particularly helpful if you are physically incapacitated or out of the country– but also should you lose mental capacity either for a short period of time or in the longer term.
What if there is no LPA?
We often hear people say “we don’t need it, everything is in joint names” or “I will make decisions as I am next of Kin”. Sadly, this is not necessarily the case.
With joint bank accounts, if a co-owner loses capacity a bank can insist on seeing a power of attorney before allowing the other co-owner(s) to deal with the account.
The sale or purchase of a property also requires an LPA if it is in joint names and one owner cannot sign.
Medical staff are not obliged to listen to “next of kin” on healthcare decisions without a power of attorney.
Finally, some care homes are now insisting that both forms of LPA are put in place.
If there is no LPA it might be necessary to make any application to the Court of Protection for a Deputyship Order. This process is long (months sometimes over a year), costly, and involves paying annual fees.
Importantly, because you are unable to do so, you do not get to choose your Deputy. This might mean someone you would not want makes financial decisions for you.
Just as importantly, the Court is reluctant to appoint Deputies to take welfare decisions. On average 375 applications are approved per year opposed to 15,000 property and finance applications. This is partly because the law allows some welfare decisions to be taken without a welfare LPA or deputyship, but again you have no control over these. Do you want someone not of your choosing (maybe a professional and a stranger) making decisions about where you live, what you wear, what you eat, what treatment you receive? If you would rather be in control of this then make a welfare LPA so you choose someone you trust to act.