If someone has difficulties that mean they can’t make decisions anymore, they will need help managing their finances. Lasting Power of Attorney (LPA) is a legal document where someone nominates a trusted friend or relative to look after their affairs if they lose capacity. You can choose whether it can be used either before, or only when, you lose mental capacity.
There are two types of LPA: one for finance and property and another for health and welfare. The processes are similar for both. A key difference though is the health and welfare one can only be used after the person loses capacity, not before.
LPAs replaced the previous Enduring Power of Attorney (EPA) system. EPAs set up before 1 October 2007 will still be valid, whether or not they have been registered, though they must be registered when the person loses capacity.
If you lose mental capacity, unless you’ve already filled in the Power of Attorney forms, your loved ones will need to apply through court to become ‘deputy’, a long and expensive process.
Instead, you can nominate a trusted friend or relative before you lose capacity, by arranging a Lasting Power of Attorney (LPA). You can appoint one or more representatives to act for you and can determine how they work together to make decisions on your behalf.
It is an important point to note that you can only set up a Lasting Power of Attorney when you have mental capacity. Once you’ve lost capacity, it’s too late.
Regardless of health, everyone should consider a Lasting Power of Attorney. Anyone over 18 can set it up – you don’t need to be unwell.
As people are living a lot longer nowadays the use of LPA’s should be a conversation all families have.
The Financial Conduct Authority does not regulate on Lasting Power of Attorney
To discuss further, Citrus Financial are available to take your call.