What are Lasting Powers of Attorney?
Putting in place Lasting Powers of Attorney in case you lose mental capacity in the future can play a crucial part in your planning
No one likes to consider the prospect of declining mental capacity but, for peace of mind and security, an LPA should be at the top of everyone’s agenda.
Managing your wealth in a challenging environment
A Lasting Power of Attorney (LPA) is a legal document that appoints one or more people (your attorney(s)) to make decisions on your behalf in the event you no longer have the mental capacity to make them yourself.
Why should you have an LPA?
Making an LPA enables you to plan in advance how your financial affairs, health and wellbeing will be looked after while you are still able to make decisions for yourself.
What is an LPA for?
The LPA replaced the Enduring Power of Attorney (EPA) on 1st October 2007. There are two types of LPA:
- LPA for financial decisions
This enables your attorney(s) to deal with your financial affairs and property. It may give them power to make decisions such as operating your bank accounts and dealing with your tax affairs. In limited circumstances, the LPA may allow the attorney(s) to make gifts of a reasonable amount to those related or connected with you, or to charity. You can choose whether this type of LPA is to be operative as soon as it has been registered – or only after you have lost mental capacity.
- LPA for health and care decisions
This type of LPA can only be used if and when you lose mental capacity. It can give your attorney(s) power to make decisions on matters such as your day-to-day care and medical treatment and where you live. It also allows you to expressly provide the attorney(s) with the power to consent or refuse life-sustaining treatment on your behalf.
How do you make an LPA?
The LPA has to be in a prescribed form, issued by the Office of the Public Guardian (OPG). It must include a certificate confirming that you know and understand the purpose and scope of the LPA and that you have signed of your own free will. It needs to be witnessed and signed by a professional or a person you have known for at least two years.
The OPG allows the forms to be completed online, but there are widespread concerns that the online system is vulnerable to abuse and we encourage clients not to use this option.
The completed LPA form must be signed by you and your attorney(s) in the prescribed order and then sent to the OPG for registration. They are such important, powerful documents that it is crucial to take legal advice about their terms and effect.
This article is for information purposes only. Readers should seek professional advice for their individual circumstances.
Farrer & Co LLP
This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
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