Are Lasting Powers of Attorney the preserve of elder clients?

03 May 2022

So you’ve thought about your will, what about a Lasting Power of Attorney? 

This is another planning tool that the wider population either do not think about or associate with older generations, but they too provide certainty during lifetime.

There are two types of LPA; Property and Financial Affairs and Health and Welfare. 

The Property and Financial Affairs LPAs cover all financial matters, including but not limited to bank accounts, property sales, share portfolios, and paying bills. 

The Health and Welfare LPA allows someone to act for the donor in relation to personal decisions such as, medical treatment, suitable living arrangements, providing care and life sustaining treatment. 

The LPAs are put in place by a client and they decide who they would like to act as their Attorney. This can be up to 4 people and they can also appoint replacement Attorneys should one of the originals not be able to act. The client (known as the donor) also chooses if the Attorneys are to act altogether for decisions (jointly) or if they can act either together or separately (jointly and severally).

There is one distinction between the LPA types – the Property and Affairs LPA can be used when the donor still has capacity (if the donor opts to allow this) and the Health and Welfare only comes into effect once the donor has lost capacity. 

It is worth remembering that someone can lose capacity at any time in their life, either permanently or temporarily. It is not uncommon to have an accident or illness that could stop you managing your own affairs and you need to know who would act for you if this were to happen, especially if you have dependents or shared assets, such as a house or business. In addition, you may have particular personal beliefs that you echo in your decision making and having the ability to nominate someone who knows this can bring peace of mind. 

We see this commonly in practice where a life-changing incident stops a client managing their own affairs, and without an LPA a court granted Deputyship Order is needed. Not only is this more time consuming, expensive to put in place and complex, but the person appointed by the Court may not be someone who you would have chosen to act. 

A public example of the difficulties in trying to manage affairs for someone without an LPA has been highlighted by the broadcaster Kate Garraway recently, who has talked openly about the difficulties she faced, in even dealing with simple utility bills, when her husband was hospitalised with Coronavirus, as they were all in his sole name. 

The Property and Financial Affairs LPA can also be useful for people whose lifestyle takes them away from home frequently. A lot can be done online now, there are occasions still where someone needs to physically sign documents, for example a property transaction, and having a nominated individual to do this can be more convenient.

The two LPAs although separate, are intrinsically linked, so it is worth considering to put in place both. The most common example that I have come across is where a Health and Welfare LPA is used to make a decision about a care package a client is to receive, but the Property and Financial Affairs LPA is needed to access the bank account in order to pay for it.  

If you want to make an LPA or for more information please contact our specialist private client team on 0161 871 3680.

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You can contact Samantha Brocklehurst via email or on 0161 871 3680.