The last year has been one of the most challenging times for a generation as Covid-19 has changed the way we live and made us all consider our own mortality. While many people think about making a Will, fewer people give consideration as to what should happen to their financial affairs if they were to lose capacity. Currently less than 1% of the population has a Lasting Power of Attorney (Office of the Public Guardian). This is despite the fact that one in three of us over the age of 65 will develop dementia (Alzheimer’s Society) and every 90 seconds someone is admitted to hospital with an acquired brain injury from sudden onset illness or an accident (Headway).
Prior to 1 October 2007 you were able to make an Enduring Power of Attorney (EPA) if you lost mental capacity. This was a legal document allowing you to appoint someone you trust (known as your attorney) to act on your behalf in relation to your property and financial affairs.
Since 1 October 2007, while Enduring Powers of Attorney completed before this date are still effective and valid, you would now make Lasting Powers of Attorney (LPA) but unlike Enduring Powers of Attorney, they also cover welfare and health decisions.
A LPA is a legal document that allows you to give someone you trust the legal authority to manage your financial affairs and continue to do so even if you lose mental capacity. But unlike EPAs, there are two different types of LPAs; one is in respect of property and financial affairs; the second allows your attorney to make health and welfare decisions for you in the event that you lose mental capacity.
Lasting Powers of Attorney offer greater flexibility than Enduring Powers of Attorney. You are able to appoint replacement attorneys should anything happen to your original attorneys. You can also place conditions and restrictions on your attorneys. You can also decide when they act for you. The process of making LPAs also includes several safeguarding measures to prevent abuse of power by attorneys.
We recommend that LPAs should be registered at the Office of the Public Guardian when they are made, so they are ready to be used immediately, if the time comes. The Government has started a new campaign called 'Lasting Power of Attorney – Your Voice, Your Decision'. As the campaign states, if you lose capacity to make decisions for yourself, 'a Lasting Power of Attorney lets people you trust quickly, easily and legally step in for you.'
According to the Government website, 70% of people think if a couple have a joint bank account and if one of them loses capacity to make decisions for themselves, the other can legally make decisions for them. However, in order to make decisions for the person who has lost capacity, you would need a LPA for financial affairs in your favour even as a spouse.
Another misconception is around the term 'next of kin.' According to the Government website 72% of people think being 'next of kin' allows you to make medical decisions for your loved one if they are unable to do so for themselves. The only way to legally make medical decisions for your loved one is if they have made a LPA for health and welfare and appointed you as their attorney. The benefit of a health and welfare LPA is that if you lose mental capacity your attorney can make decisions about your medical care as if they were you - they will have access to your medical records, they can decide where you live and also make life-sustaining medical treatment decisions for you.
By making a Lasting Power of Attorney, you can ensure that, should you lose mental capacity, you will have people you have appointed, who you trust, to manage your affairs and make medical decisions for you in your best interests. You cannot put a price on the peace of mind that comes from having your affairs in order, whatever may happen.