Why a Lasting Power of Attorney should be on your radar
While not everybody will make one, a Will is nevertheless a standard process engrained into our psyches; at the end of the day we all want our hard-earned estates to transfer to the right people when we die.
A Lasting Power of Attorney (LPA) is arguably less likely to be on our radar, yet it’s no less important.
That’s because a person’s estate may need managing prior to their death, and this can be problematic if no arrangement is in place. In fact, the lack of an LPA can be both financially expensive and emotionally traumatic to those involved.
Even with a Will in place, if an individual loses mental capacity and is no longer able to make independent decisions, can family members and/or loved ones be fully confident that the individual’s express wishes are being carried out? Do they know who the individual would want to take over their affairs?
These questions can be tough, especially at times of heightened stress and emotional upheaval.
What is a Lasting Power of Attorney?
An LPA is a legally-binding document which allows an individual to assign decision-making autonomy to a trusted person – often a family member, spouse, friend or a known individual relied upon to make sound and informed decisions on their behalf if they are not able to do so.
Specifically, there are two recognised types of LPAs, one is Health and Welfare and the other is Property and Financial.
Why a Lasting Power of Attorney is so important
There are several scenarios – such as an accident or illness – that could lead to diminished mental faculties at any stage of life.
Nevertheless, examples of LPAs being required for age-related reasons are increasingly common. According to the Alzheimer’s Society, more than one million people in the UK will have dementia by 2025.
There is, of course, a good chance you may not need to call on an LPA at all. Without one, however, there is always a risk; planning for unforeseen eventualities can help mitigate this risk.
1) Mental capacity – An LPA must be entered into when the individual concerned has the mental capacity to do so; ensuring their wishes are clear and undeniably theirs. Entering into an LPA now at full mental capacity ensures the validity of the document.
2) Peace of mind for you and your loved ones – Mental capacity/incapacity is not always black and white and not always a gradual, or even permanent, thing. Whatever life throws, and if a mental capacity situation manifests itself in any way or form, an LPA has you covered.
3) Reduce the pressure on those you care about – A legally-binding document which expresses your exacting wishes can remove grey areas at a challenging time and relieve some of the pressures on those who have a stake in your welfare.
4) Flexibility and control – LPAs can be changed and updated, so a decision made now doesn’t need to be finite. Situations can change in life and if you feel the need to amend the terms, then that is an option, providing you retain mental capacity.
5) Safeguarding valuable assets – Money is by no means the be-all and end-all. However, if you are a person of significant means, there may be extra pressure when considering the future of your money. An LPA ensures your hard-earned assets are in safe hands should you no longer have capacity to manage them yourself.