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We all know that we should write a will, but too few of us know we should also consider something called lasting power of attorney.
A lasting power of attorney (LPA) gives another individual the legal authority to look after specific aspects of your financial affairs or health and welfare should you lose the capacity to do so. It’s not just for the elderly; younger people may become incapacitated through accident or illness.
If you do not have an LPA in place and later become mentally incapacitated, relatives may face long delays and expense in applying to the court of protection to get access and take control of your assets and finances.
LPAs are designed to be recognised by financial institutions, care homes and local authorities, as well as tax, benefits and pension authorities. They are legal documents that can be set up relatively cheaply, with the help of a solicitor. You may consider having one alongside your will.
LPAs were introduced in October 2007, replacing the previous system of enduring powers of attorney (EPA) – although an EPA created before October 2007 remains valid.
There are two types of LPA: one that can cover decisions about money matters, known as a property and financial affairs LPA, and one that can cover decisions about healthcare, known as a personal welfare LPA. A key difference is that a property and financial affairs LPA can be used while someone still has capacity, whereas a personal welfare LPA can only be used once they have lost it.
A person administering a property and financial affairs LPA can make decisions on things such as buying and selling your property, dealing with your bills, running your bank accounts and investing your money. If they have a personal welfare LPA, they can generally make decisions about where you should live, how you should be treated medically, what you should eat and who you should have contact with.