Why should I have an LPA?

What Is Lasting Power of Attorney

A Lasting Power of Attorney (LPA) is “… a way of giving someone you trust the legal authority to make decisions on your behalf if you lack mental capacity at some time in the future or no longer wish to make decisions for yourself.” – Age UK. There are two types of LPA, one that covers financial decisions, and one that covers health and welfare decisions. To understand a little more about what an LPA is, please do read our article here.

However, even if you know what an LPA is, you may not be sure if you should bother setting one up just yet. If you’re thinking like that, here’s some food for thought.

  • An LPA is only valid if you had the mental capacity to set it up when it was set up – Once it reaches the point that your mental capacity cannot be verified, it is too late.
  • Mental and physical incapacity can hit at any time – This isn’t written to scare you, it’s just one of those things. Accident or illness can strike without warning. If you do not have either type of LPA in place, your family may struggle to gain access to your bank accounts, pay your bills, or make payments on your behalf for your mortgage, etc.
  • Delays and expense – Without an LPA relatives can face long delays and suffer considerable expense if they have to apply through the Court of Protection to get access and control of your assets and finances. This is likely to be the last thing they want to have to deal with when times are tough.
  • The LPA system makes things easier – LPAs are designed to be recognised by official bodies like care homes, HMRC, banks, local authorities, pension providers etc. Once an LPA has been verified, taking action on your behalf becomes much easier for your attorneys.
  • They are not expensive to set up – A small cost to you now will save your family a lot of money in the long term.
  • A financial LPA enables you to retain a lot of control over your affairs – You can, of course, give your chosen attorney(s) free reign, or you can restrict their decision making capacity by specifying your wishes clearly.
  • You don’t need to be incapacitated for a financial LPA to operate – This can be very useful. For example, if you’re on holiday and something happens to your home, your nominated person can take action on your behalf.
  • A health LPA enables you to retain a lot of control over your welfare – You can be very specific about your care, even on day to day matters. For example, you can set out what your day to day routine should be, what you should be given to eat, and who can visit you.
  • An LPA is a legal document that has to be verified – This will give you peace of mind. They have to be signed by a certificate provider or solicitor, which means they are ‘vetted’ by qualified specialists. Plus LPAs cannot be amended or set up by someone else. You are in control.
  • If you don’t have an LPA in place it is the court that decides for you – A court will follow a set procedure, which may limit the amount of power your relatives have. This can make life difficult for them.
  • A court may insist a solicitor is involved – This can make things very expensive.

For more guidance and information on setting up a lasting power of attorney, please do contact us. It’s worth making an informed decision now.

What is an Lasting Power of Attorney (LPA)?

Lasting-Power-Of-Attorney

When you hear talk about Wills, you often next hear talk about LPAs as well – Lasting Powers of Attorney. It’s not so much that they go hand in glove, it’s just that the rationale for having a Will actually points towards the need to have LPAs in place too. So we thought it would be a good idea to give you some information on these useful, and very important, legal documents to complement our article on why it’s important to have a Will (read here).

But what is an LPA?

“A lasting Power of Attorney (LPA) is a way of giving someone you trust the legal authority to make decisions on your behalf if you lack mental capacity at some time in the future or no longer wish to make decisions for yourself.” – Age UK

There are actually two types of LPA. Both fulfil different roles and are not interchangeable. They are:

  1. An LPA for financial decisions

This type of Lasting Power of Attorney can be used while you still have mental capacity. An attorney, a person to whom you give permission to make decisions on your behalf, can generally do so on things such as:

  • Buying and selling property
  • Paying the mortgage
  • Investing money
  • Paying bills
  • Arranging repairs to property
  1. An LPA for health and care decisions

A Lasting Power of Attorney for health and care decisions covers healthcare and personal welfare. It’s important to note that it can only be used once a person has lost mental capacity. A nominated attorney can generally make decisions about things such as:

  • Where you should live
  • What medical care you should receive
  • What you should eat
  • Who you should have contact with
  • What kind of social activities you should take part in

What can I specify in an LPA?

An LPA is a powerful document that enables you to retain control over your life. You can specify exactly what decisions your nominated attorney(s) can make. So you can allow them to make all decisions on your behalf, or restrict them to only certain types of decision. Thinking these things through carefully now, therefore, is worth doing before it’s too late.

One thing to bear in mind is that if you are setting up an LPA for financial decisions, the person you nominate must keep accounts. You can request regular reports on expenditure and income. And if you then lose mental capacity, you can specify that these reports are sent to your solicitor or a family member instead. They must also make sure their money is kept separate from your money. So check that this is possible with them in advance.

When is a lasting power of attorney valid?

IMPORTANT NOTE: An LPA is only valid if:

  • You had the mental capacity to set it up when it was set up
  • You were not put under any pressure to create it

To ensure this, the LPA has to be signed by a certificate provider. When a certificate provider signs the document, they are confirming that you understand what the LPA contains and that you haven’t been put under any pressure to sign it. They are typically someone you know well, but can also be a professional person, such as a doctor, social worker or solicitor.

Once these criteria have been met, the LPA must then be registered with the Office of the Public Guardian (OPG) before it can be used.

A final word…

As you can see, LPAs are important documents that facilitate critical decisions being made on your behalf if you’re no longer to do that for yourself. For more information on why you should have an LPA, please do read our article here or feel free to contact us to discuss your requirements.

What happens if I don’t leave a Will?

protecting a family

First things first… what is a Will?

“A Will tells everyone what should happen to your money, possessions and property after you die (all these things together are called your ‘estate’).”

What does a Will cover?

Most importantly, a Will sets out two things, though it can cover additional aspects like your funeral too. These are:

  1. How your money, property, and possessions are to be distributed when you die i.e. what, and how much, goes to whom.
  2. Who is in charge of administering your estate (referred to as your executor(s)); this can be more than one person, and may include a solicitor but doesn’t have to.

Sounds complicated? It doesn’t need to be, though everyone’s circumstances are different. The best thing is to discuss your circumstances with an advisor.

What is ‘intestacy’?

If you die without having made a Will, this is called dying intestate.

The law varies slightly depending on whether you’re based in England, Wales, Scotland and Northern Ireland, but there are some issues that are common to all.

  • If you’re not married and not in a civil partnership, without a Will, your partner is not legally entitled to anything when you die.
  • If you’re married, without a Will your husband or wife may inherit most or all of your estate and your children may not get anything (except in Scotland). This is true even if you are separated but not if you’re divorced.
  • If you have children or grandchildren, how much they are legally entitled to will depend on where you live in the UK – but if you make a Will you can decide this yourself.
  • Any Inheritance Tax that your estate has to pay may be higher than it would be if you had made a Will.
  • If you die with no living close relatives, your whole estate will belong to the Crown or to the government. This law is called bona vacantia.

What happens if I don’t leave a Will?

Well, if you don’t make a Will those who are administering your estate have to turn to instructions set out in law to work out how to distribute your money, possessions and property. This will include who is eligible to receive a share, and how much they get. If you think your spouse and children automatically get everything, then you’re very likely to be wrong. And if you’re not married, but you have children, it may be that everything goes to your children and your partner gets nothing. To add complication, if you have a second family you may not end up providing the financial support where you think it’s needed most. To understand a little more about why you should have a Will we’d suggest you read our article entitled “Why should I make a Will?” here.

In summary, therefore, a Will isn’t something to leave until you’re ‘old’. Having a Will really does make things easier for family and friends during a difficult time. And it’s something that you should put in place as soon as possible if you haven’t got one.

Why should I make a Will?

organizing-your-will_estate-planning-bogin-munns-florida

First things first… what is a Will?

“A Will tells everyone what should happen to your money, possessions and property after you die (all these things together are called your ‘estate’). If you don’t leave a Will, the law decides how your estate is passed on – and this may not be in line with your wishes.”

The simple answer to the question is that it makes things much easier for your family and friends. But obviously there are aspects that you may not be aware of that explain why this really is the case.

Nine reasons you need a Will…

  1. If you die intestate (i.e. without having made a Will) then the process for dealing with your estate is time consuming. Matters can be complicated to deal with, which can make things more costly than necessary if your family need legal advice and help to sort things out. But putting aside both the financial impact and time consuming nature of what has to be done, you are potentially adding to the burden of sorting your affairs out at a time that is already stressful and upsetting. If you have a Will in place, you are helping your family to keep going.
  2. Without a Will, it is the law who defines who gets what… not you. If you don’t write a Will, everything you own will be shared out in a standard way defined by the law – which isn’t always quite how you want things to be. Your spouse, children and other dependents may not get as large a share of it as they need to live because other relatives may be able to put in a claim for a share too. Having a Will reduces this risk significantly. And remember, this can include charities etc., as well as family and friends.
  3. If you have a partner but are not married or in a civil partnership, your partner is not legally entitled to anything when you die. If you make a Will, however, they can be included.
  4. If you are separated but not divorced when you die without a Will, then your estranged spouse will still inherit from you.
  5. A Will can help reduce the amount of Inheritance Tax that may be payable on both the value of your property and money you leave behind. It’s likely that you’ll need to take advice on this because there are certain criteria that need to be met to achieve this.
  6. Having a Will does potentially help to avoid disputes. Much as you don’t want to think of family and friends bickering over your assets once you’re gone, sadly it does happen. Family rifts are the last thing you want to cause in the event of your death and having a Will helps to reduce the risk of this.
  7. If you die without having made a Will and you have no relatives, your estate will go to the Crown or the Government. This law is called bona vacantia.
  8. Having a Will can help to protect your assets for future generations. You can’t dictate forever what happens to things that have been in your family for generations, but setting out your wishes in a Will can help to achieve this.
  9. It’s an opportunity to express your wishes for your funeral. For example, you can state whether you’d prefer to be cremated or buried, and what type of service you’d like. Details such as whether you’d like people to donate money to a cause rather than send flowers can even be included.

For advice on your Will & Estate planning needs please contact us for a no obligation chat.