Recent figures published by FTAdviser confirm that 80% of over-55s do not have a Lasting Power of Attorney (LPA) in place.
The research, from Lloyds Bank, also found a lack of understanding around LPAs. While 29% of those surveyed believed that an LPA could only be put in place once a person becomes ill, a fifth (19%), answered that they didn’t know when the right time was to put an LPA in place.
So, what is an LPA, when can you appoint one, and why should you?
There are two main types of LPA
An LPA allows you to choose someone you trust to look after your affairs if you are no longer able.
While we might not like to dwell on the prospect, accidents or illnesses can strike at any time. With an LPA in place, you’ll have a legal document outlining who should manage your affairs, and how. And because the need can arise at any time, anyone over the age of 18 can make an LPA.
You’ll need to choose between two main types:
- A Health and Welfare LPA – Covering your daily routine, medical care, and moving into a care home, for example
- A Property and Financial Affairs LPA – Appoint someone to manage your finances, possibly through paying bills or collecting benefits on your behalf.
You’ll need to have the mental capacity to put an LPA in place, but once it is registered it can kick in when needed and be permanent or temporary.
3 reasons why you need an LPA in place now
1. You put yourself back in control
While becoming ill or being involved in an accident is outside of your control, you can take the initiative by setting clear plans in place before the worst happens.
You can choose who would look after your affairs, as well as the specific aspects of your life they would have control over. And because you must have the mental capacity to put an LPA in place, you know that your wishes will be followed in line with this legal document, without risk of coercion.
This means you can choose a person you trust, rather than having a court appoint someone.
You might opt for more than one LPA and limit the types of decisions they can make.
Maybe you want them to make decisions together or specify the exact types of decisions each attorney can make?
You might want to choose successors too, to ensure your interests will still be looked after if an attorney dies.
2. Decisions can be made quickly, cheaply, and with less stress
A sudden accident or illness could mean a very stressful time for you and your family. An LPA could help reduce cost and worry and allow for a much easier and quicker transition.
Without an LPA in place, the Court of Protection will need to appoint a deputy. Your family will need to apply for this.
The initial application fee is currently £371 (doubled if you are applying for a Health and Welfare LPA and a Property and Financial Affairs LPA), plus an additional £494 if the court decides your case needs a hearing.
Your deputy will then need to pay an annual supervision fee to the Office of the Public Guardian, plus a £100 assessment fee if they’re a new deputy.
The process could take between four and six months, during which time your affairs will be going unmanaged.
The costs to register an LPA yourself are just £82 in England and Wales and £77 in Scotland.
3. You’ll have peace of mind
Once you’ve registered an LPA, it can stay in place for the rest of your life, and only come into force if needed.
This gives you peace of mind that your affairs will be looked after, should the worst happen, and you become unable to make decisions for yourself. Also be aware that an LPA can be temporary or permanent.
If you find yourself in hospital after an accident, you’ll be able to concentrate on your recovery, knowing that the LPA has been invoked temporarily to ensure your bills are still paid.
An LPA can also be used for long-term conditions like dementia, meaning that your wealth and care will be in the hands of trusted individuals if you are no longer looking after these things yourself.
To be legally binding, an LPA must be registered with the Office of the Public Guardian. This can take up to three months so apply now.
Get in touch
If you’d like to discuss the benefits of an LPA or any other form of financial protection, please email hello@globeifa.co.uk or call us on 020 8891 0711 to discuss how Globe IFA’s expert financial advisors can help you.
