I Have a Will, Why Do I Need a Lasting Power of Attorney?
10 August 2017
Making a Will is often considered at certain key stages of your lifetime. It could be prompted by buying your first home, deciding to get married, having children, a change in your financial circumstances, retirement, a bereavement…the list goes on.
Whilst many people choose to put their Will in place around these life events, what is often ignored is the need for a Lasting Power of Attorney (LPA). In this article we look at some of the circumstances where putting both a Will and an LPA in place could be hugely beneficial to both you and your family.
What is a Lasting Power of Attorney?
Firstly, let’s summarise what a Lasting Power of Attorney is and why it is different from a Will. A Lasting Power of Attorney (LPA) is a legal document that allows you to choose people you trust to make decisions for you during your lifetime. A Will is a document that sets out what you would like to happen to your Estate after your death.
So, in simple terms, an LPA is there is protect your wishes whilst you are alive and a Will is there to protect your wishes after you’ve died.
A common question asked about LPAs is: “Why would I need someone to make decisions for me during my lifetime, surely I can just make them myself?” The answer is that there may come a time in your life when you’re unable to make decisions yourself. This could be as a result of ill health or an accident.
As Lawyers we often hear the response: “That’s OK, if that ever happens to me in the future then I’ll make an LPA then”. The problem here is that you can’t make an LPA then, it’s too late. Nor can any of your children, loved ones or even your husband or wife. No one can put an LPA in place on your behalf.
What Happens if You Don’t Have an LPA?
A typical question that then follows is: “So if I didn’t have an LPA in place, who would make decisions for me and how would they access my money, deal with my property and pay my bills?” The short answer is that, without an LPA already in place, no one has the legal authority to deal with your affairs, not even your spouse, partner or child.
This information normally comes as a surprise to people. The idea that bills couldn’t be paid and income or capital couldn’t be accessed, even when you are at your most vulnerable, seems unfair. But, when you think about it some more, it does makes sense. How can the law presume to know who you would have given the legal authority to access your money or make important decisions about your health and welfare? The reality is that it can’t, so if you want to ensure that you have someone you trust making important decisions for you then, as part of making future plans, you need to be thinking about putting an LPA in place.
There are two types of LPA – the first is a Property and Financial Affairs LPA and the second is a Health and Welfare LPA. They both have different functions.
A Property and Financial Affairs LPA can be implemented whilst you still have capacity and allows your Attorney to potentially have the authority to deal with your finances, access to your bank accounts, any investments and even to sell your property on your behalf.
A Health and Welfare LPA allows your Attorney to decide what treatment you should receive and details about your day-to-day living, such as what clothes you wear, what food you eat and even where you live. This LPA can only be made whilst you have capacity but will not come into force until you lack the capacity to make your own decisions about your care, treatment and welfare.
Unfortunately there are still thousands of people each year who become unable to make their own decisions and do not have an LPA in place. In these circumstances it requires someone to apply to the Court of Protection and be appointed their Deputy. This is a long and expensive process which can easily be avoided by already having an LPA in place.
Where there isn’t anyone willing to go through this application process then it’s ultimately left to representatives of the Local Authority to apply to manage your finances.