16 Jul Are Lasting Power of Attorneys only useful when you lose mental capacity? No.
Linda Hall explains what a Lasting Power of Attorney for financial decisions is, and gives examples of when they can help, even if you have not lost mental capacity.
What is a Lasting Power of Attorney?
A Lasting Power of Attorney (LPA) is a legal document that allows you to appoint people known as attorneys who can make decisions in relation to your affairs if you are unable to do so. You can make LPA’s for financial decisions, decisions about health and welfare or both. No legal training is required but attorneys should always be trustworthy and reliable. If you are appointing someone to manage your property and financial affairs they also need to know enough about money matters to be able to carry out the role and if necessary, to recruit the help of a financial advisor or other appropriate experts as and when required.
A LPA is termed ‘lasting’ as it can continue to operate if you lose the mental capacity to manage your own affairs. However, there may be many circumstances in which having a Property and Financial Affairs LPA would be useful even while you retain capacity.
Generally speaking, most people like to retain control of their financial affairs. By making a Property and Financial Affairs LPA you are appointing attorneys to help you with your finances if for any reason you are unable to manage them yourself and this could be for reasons of physical or mental incapacity. Many people making such an LPA hope it will not be needed but think of it as a safeguard for the future if for any reason assistance is needed.
Examples of when a Lasting Power of Attorney help?
Consider the following scenarios:
- Mrs A is in HM Forces and lives with her wife in accommodation provided by her employer, the Royal Navy. Mrs A’s work often takes her abroad and by registering an LPA with the bank her wife is able to assist and manage her financial affairs whilst she is out of the country.
- Miss B lives alone and has rheumatoid arthritis. Although she has ongoing treatment she is prone to relapses whereby she is temporarily incapacitated and her mobility can be severely impaired. She has a niece and nephew that she trusts implicitly and she has appointed them to be her attorneys under an LPA. If Miss B is having a bad bout of arthritis she can call upon her attorneys to assist her. They can speak to the bank on her behalf, attend the Post Office to withdraw her benefits and she can concentrate on her recovery knowing that her financial affairs are being managed appropriately.
- Mr and Mrs C appointed each other under a LPA and also their son and daughter. Mr C often works away from home and can be away on business. During one such absence Mrs C fell over in the garden and broke her arm and was unable to drive or get to the shops to have access to her financial affairs easily. After consultation with Mr C the son and daughter were able to assist their mother and ensure that the household could continue to run smoothly. They could also walk the dog!
- Mr D is elderly, in his late 80’s and lives alone. He was an accountant in a former life and although he would be capable of managing his financial affairs, he had enough of this whilst in full time employment and has no wish to continue to do so during his retirement. He made an LPA some years ago appointing his wife and daughter to be his attorneys. His wife recently sadly passed away and he is now reliant on his daughter to assist with his paperwork. The LPA is registered with the bank and as attorney his daughter can manage his affairs consulting her father on any decisions so he remains fully in control. He is much happier letting his daughter deal with phone calls to the bank, bank statements and ensuring that all his direct debits and standing orders are managed correctly.
- Following the death of his wife, Mr F made an LPA appointing his two daughters to help him with his affairs. Mr F is a very practical man and has always worked in manual occupations. His wife had been a bookkeeper and had managed all their financial matters. As well as coping with the grief of losing his wife he was also concerned that the running of his financial affairs was slipping away from him. Although he had full capacity and continued to work for many years he asked his daughters to assist him to ensure that his finances continued to run smoothly.
There are many instances when having an LPA will give you the security of knowing that you have appointed attorneys you can trust to manage your affairs in times when you are unable to do so yourself. There are any number of reasons why you may choose to hand over your financial affairs to your attorneys.
When an LPA is in place there is also the comfort of knowing that if you did lose capacity for any reason the appropriate document was in place giving people you know and trust the ability to manage your affairs.
I have only dealt with the LPA for property and finance in this article however there is also a LPA which can be made to appoint the attorneys to manage your health and welfare. The health and welfare LPA will only take effect if you lose mental capacity and can give your Attorneys the authority to make decisions relating to life-sustaining treatment and expressing your wishes in relation to your health and welfare if you are unable to do so due to mental incapacity.