Protecting yourself and your assets: why you need an LPA and how to get one
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Many of us will appreciate the importance of a Will to pass on our assets after death, but what happens should we become mentally incapable of making our own decisions?
You may assume that your loved ones will automatically be able to act on your behalf, but this is not necessarily the case. To understand why, we chat with Gary Taylor from TaylorMade Estate Planning in the Cotswolds.
He reveals why drawing up a Lasting Power of Attorney (LPA) is something everyone should consider doing, sooner rather than later.
Q: What is a Lasting Power of Attorney (LPA)?
A: An LPA legally allows a chosen individual or individuals (the attorneys) to make decisions on behalf of a friend, loved one or relative (the donor) if they lack the mental capacity to make decisions for themselves.
These can be decisions involving care, welfare, property or finances. Each attorney can be allocated different authority over various tasks, like day-to-day banking affairs may be dealt with by one attorney for example, whilst selling a main asset such as a house may require all attorneys.
“It’s important to be proactive, not reactive,” Gary says, “an LPA must be drawn up by someone stating their wishes whilst they are well and before they are mentally incapable of signing any legal documentation. It’s far better to see an LPA as a preparatory measure.”
Q: Are there different types of LPAs?
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A: Yes, and it’s important to be aware of the differences:
- Property and financial affairs
This LPA allows the attorneys to ‘step into the shoes’ of the individual, liaising with financial institutions such as banks, building societies, pensions, investments and insurance companies, as well as dealing with the legalities of selling assets and property.
- Health and welfare
This LPA deals with the individual’s care and wellbeing requirements. It can cover medical treatment and allows communication with care providers and social services, giving the attorneys the legal right to act on behalf of the individual’s wishes when deciding on appropriate treatments. It can also cover the ability to provide or withhold life-sustaining treatment to uphold the individual’s end of life wishes.
Q: What happens if I don’t have an LPA?
A: Without an LPA, a Court of Protection hearing would be held to appoint a deputy of affairs to make decisions on behalf of the individual. This can prove to be expensive, time-consuming, and may delay an individual receiving the treatment or financial help they need right away.
“I’d highly recommend getting an LPA not only to entrust your loved ones with your affairs, but to prevent further legal difficulties later down the line,” Gary says.
Q: How can I get an LPA?
A: You can draft your own LPA free of charge. However, this method will run the risk of future complications regarding the legitimacy of the document if it's not correctly worded, certificated, signed and witnessed.
The certificate provider must know the donor for a minimum of two years to certify their mental competency, or be a legal or estate planning professional who is trained in confirming mental capacity. “This is why I’d always advise anyone considering an LPA to seek out professional advice,” Gary suggests.
“If the document is not filled out correctly, and the condition of the individual worsens, it will be too late to then make the necessary amendments,” he adds.
Once an LPA has been signed, Gary also recommends registering it with the Office of the Public Guardian (OPG), as registering can take eight-10 weeks, and if left to your attorneys, this could mean lost time where they need to make decisions but are unable to do so.
Visit taylormadeplanning.co.uk/lasting-powers-of-attorney to find out more about LPAs or to seek advice on getting one.
Contact 07507720523 or email@example.com to speak to the team at TaylorMade Estate Planning.