More people are now setting up Lasting Powers of Attorney (LPAs), not just those in later life.
Often written alongside a will, these important legal documents allow you to appoint one or more trusted representatives or ‘attorneys’ to take charge of your finances and/or welfare if you are unable to take look after your own affairs at some point in the future.
The growing use of LPAs is hardly surprising given the ageing population, but it is a mistake to think that they are just for the elderly. Anyone over the age of 18 can set up an LPA – after all, accidents or illness can occur at any time of life.
In England and Wales there are two types of LPA – one covering health and welfare and another for property and financial affairs. You can set up either or both types and appoint the same or different attorneys for each one. For LPAs to be legally valid, they must be signed, witnessed and registered with the Office of the Public Guardian, which costs £82 for each LPA. In Scotland, Powers of Attorney are slightly different.
Property and financial affairs LPAs are not just for people with substantial assets. At the simplest level, they can allow your designated attorney to access your bank account and ensure that essential bills get paid.
When it comes to choosing an attorney, you can pick a spouse, partner, relative or friend or even a professional, such as a local solicitor, although remember that they are likely to charge for this service. The stipulations are that your attorney must be over 18 and mentally capable of making decisions for themselves. Bankrupt individuals cannot be appointed for financial LPAs.
LPAs do not automatically give attorneys immediate access to your finances. In fact, you must give express permission before an attorney can use the powers granted under a property and financial affairs LPA, although it can be used as soon as it has been registered. You have to be deemed mentally incapable of making your own decisions before a health and welfare LPA can take effect, for example, if you have dementia or are in a coma after a car crash.
People often choose to set up an LPA when they are writing their will. Many LPAs are never put into effect, but having one can provide peace of mind that a trusted friend or relative would look after your affairs if your health failed.
Akrivis Wealth work alongside a number of legal firms who are experts at drafting these important documents, so if you would like to discuss this area in more detail, please do get in touch.
The Financial Conduct Authority does not regulate will writing, trusts and some forms of estate planning.