When should you set up a Lasting Power of Attorney?

When should you set up a Lasting Power of Attorney? Probably before you think you need one.

Most people think of a Lasting Power of Attorney as something for later. A job for when you’re older, or when a health scare on the horizon suddenly makes it feel necessary.

That instinct is understandable, but it gets the timing the wrong way round.

An LPA needs to be made while you still have the mental capacity to understand what you’re doing and the decisions involved. This means the right time to put one in place is often precisely when it still feels unnecessary.

Why you shouldn’t simply wait until you need one

The reason is two-fold. The first comes down to mental capacity.

To make a Lasting Power of Attorney, you need to understand what the document means and the authority you’re giving to someone else. If you lose the capacity to make an LPA, it is too late to create one.

Nobody can simply sign one on your behalf, and family members cannot automatically take over your affairs, however obvious it might seem that they are the people you would have chosen.

Instead, someone may need to apply to the Court of Protection to become your deputy. That is a very different process. It can take considerably longer, involve substantially greater costs and come with ongoing court supervision.

Most importantly, you have lost the opportunity to decide for yourself who you want to act on your behalf.

The second reason is timings. Simply signing a LPA does not make it able to be used. It first needs to be validated by the Office of the Public Guardian, a process which can take months. Until this last step is completed, your attorneys will not be able to use the banks, utility providers, care homes or any third party.

It’s not just about getting older

Perhaps the biggest misconception about LPAs is that they’re mainly something for later life.

Loss of capacity can happen at any age. It could result from a serious accident, brain injury, stroke or sudden illness, as well as conditions such as dementia.

None of us particularly wants to think about those possibilities, especially when we’re fit and healthy. But that’s really the point.

An LPA isn’t something you make because you’ve lost capacity. It’s something you put in place in case there comes a time when you do lose it.

If you have a home, savings, financial commitments, a business or people who depend on you, there is a good argument for thinking about who would manage things if, temporarily or permanently, you couldn’t.

What does setting up an LPA involve?

There are two types of Lasting Power of Attorney.

A Property and Financial Affairs LPA covers decisions involving things such as bank accounts, bills, investments and property.

A Health and Welfare LPA covers decisions about matters such as medical treatment, care and where you live.

You choose the people you trust to act as your attorneys and can also nominate replacement attorneys in case somebody you’ve chosen is unable to act when the time comes.

There is currently an Office of the Public Guardian registration fee of £92 for each LPA, although reductions or exemptions may be available depending on your circumstances. Professional fees will also apply if you ask a solicitor to prepare the LPAs and advise you.

An LPA can be useful even when you still have capacity

There’s another misconception worth clearing up.

A Property and Financial Affairs LPA does not necessarily remain untouched until you’ve lost capacity. Provided you have authorised it, your attorneys can help you with financial matters while you still have capacity.

That could be useful if, for example, you’re temporarily unwell, spending a long period in hospital or simply need somebody you trust to deal with particular financial matters for you.

A Health and Welfare LPA is different. Your attorneys can make decisions under it only when you don’t have the capacity to make the particular decision yourself.

What you’re really choosing

The practical purpose of an LPA is important, but perhaps its biggest advantage is control. You choose who you trust to act for you.

You can decide whether attorneys should make decisions together or separately. You can appoint replacements. You can include instructions and preferences about how you would like certain matters handled.

You make those choices yourself while you’re able to do so.

Without an LPA, if you subsequently lose capacity, someone may need to ask the Court of Protection for authority to make decisions on your behalf. The Court decides whether that person should be appointed as your deputy and what powers they should have.

That’s a very different position from choosing your own attorneys in advance.

The cost of waiting

Families are sometimes surprised to learn that being someone’s spouse, partner, or child doesn’t automatically confer authority to manage that person’s finances if they lose capacity.

Without an appropriate LPA, bank accounts can be difficult to manage, bills and financial decisions can be delayed, and an application to the Court of Protection may be required.

The application process also involves court fees and may require further assessment, supervision and professional costs.

We’ve written separately about what happens when a parent loses capacity without an LPA already in place, including what families may need to do next.

The important point is that putting an LPA in place beforehand is generally much simpler than trying to resolve matters after capacity has been lost.

So, when is the right time to make an LPA?

For most people, the answer isn’t a particular age. It’s when you’re able to make decisions for yourself.

If you don’t currently have LPAs in place, it’s worth considering who you would want to make important financial or welfare decisions for you if you were ever unable to.

At Claire Nash Solicitors, we can talk you through both types of Lasting Power of Attorney, help you decide how you want your attorneys to act, and prepare and register the documents for you.

To discuss putting Lasting Powers of Attorney in place, get in touch with us and we’ll guide you through the process.