Who you choose to act on your behalf if you lose mental capacity is an important decision. You want to select someone you trust and you feel confident could act in your best interest should you need them to. So, read on to discover five practical questions you might want to answer when you’re setting up a Lasting Power of Attorney (LPA).
An LPA gives someone you trust the ability to make decisions on your behalf if you’re no longer able to. For example, they could take on this role if you’ve been involved in an accident or suffer from an illness that means you don’t have the mental capacity to handle your affairs.
There are two types of LPA:
· Health and welfare LPA, which would cover decisions like your medical care, whether to continue life-sustaining treatment, moving into a care home, and your daily routine
· Property and financial affairs LPA, which would cover decisions like paying your bills, managing your bank account or other assets, and selling your home.
You should consider naming both types of LPA. They could provide you with security and ensure someone is acting on your behalf if you’re in a vulnerable position.
According to FTAdviser, the number of LPAs registered in the last quarter of 2023 jumped by 37% when compared to a year earlier and marked the first time registrations exceeded a million.
Yet, a separate study from Just Group also suggests that millions of families could be unable to act on behalf of their loved ones if something happened to them. Indeed, it’s estimated that 59% of over-75s haven’t arranged an LPA – the equivalent of 3.4 million people.
If you don’t have an LPA set up, someone wishing to act on your behalf may need to apply to the Court of Protection to be appointed as your “deputy”. This could mean someone you wouldn’t choose is given the responsibility of handling your affairs.
In addition, going through the Court of Protection can be a costly and lengthy process. It might place unnecessary stress on your loved ones at an already difficult time and could mean your affairs are left unattended for months. For instance, it may mean that you don’t have the support you need at home, such as care services, or that bills go unpaid.
What to consider when choosing your Lasting Power of Attorney
Your LPA must be someone who is aged 18 or older. Often, people choose family members as their LPA, but you might also select a trusted friend or even a professional, such as a solicitor, to act on your behalf.
These five practical questions could help you decide who to name as your LPA.
1. How many Lasting Powers of Attorney will you name?
You can select just one LPA, but you can also choose several people to act on your behalf. Multiple LPAs can be useful and help relieve some of the pressure they might feel if they need to make decisions for you. For example, if you have two children, you might choose to name them both so they can share the responsibility.
Even if you choose a single LPA, you may also want to name a replacement in case your first choice cannot fulfil their role.
2. Who do you trust to act on your behalf?
One of the first questions you’ll often want to consider is who you trust to make decisions on your behalf. An attorney will potentially have a lot of power over your life and financial affairs. So, it’s important you feel comfortable giving them this responsibility and are confident they’ll act in your best interests.
If you have multiple LPAs, it might be important to consider how well they’ll work together. Conflicts arising could harm your wellbeing and mean decisions are delayed.
3. Who has the right skills to act as a Lasting Power of Attorney?
Next, you may want to think about whether the people you’d choose as an LPA have the right skills for the role. You might want to consider how they handle their affairs – are they generally organised and make decisions that you agree with?
4. Would your Lasting Power of Attorney be comfortable making large decisions on your behalf?
Becoming an LPA can be a lot of responsibility, which some people might not be comfortable with.
Having a conversation with the person or people you’d prefer to act on your behalf can be valuable. It could provide an opportunity to talk about what your wishes would be, such as your views on life-sustaining treatment, and ensure they’d be confident making potentially difficult decisions for you.
5. Will your attorneys be able to make decisions independently?
Finally, if you’ll be naming more than one LPA, you’ll need to decide if they can make decisions independently or must act together.
Your LPA will state whether they must make decisions “jointly”, meaning all attorneys must agree, or “jointly and severally”, which means they could act independently. Being able to act severally might be useful if decisions need to be made urgently, such as those relating to medical treatment.
You can specify which decisions you’d like them to make together. For example, you might state they can handle tasks like managing your bills severally, but when it comes to selling property, they must make it jointly.
Contact us to make a Lasting Power of Attorney part of your estate plan
Naming an LPA can form part of your wider estate plan that considers how to manage your wealth later in life and when you pass away. If you’d like help creating an estate plan, please contact us.
As your financial planner, we may also understand your goals and what you’d like your LPA to consider when making financial decisions for you. We could offer support and guidance if they need to act on your behalf.
Please note:
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority does not regulate estate planning or Lasting Powers of Attorney.