Wealth Planning & Mental Health
What is a Lasting Power of Attorney?
Lasting Powers of Attorney (LPAs) are incredibly important in the UK, as they enable you to make arrangements for someone else to manage your affairs if you're no longer able to. This means that if you become mentally incapable of making decisions due to an illness or accident, a trusted person can make those decisions on your behalf. LPAs can cover decisions relating to your finances and property, healthcare, and welfare. It's important that you set up an LPA while you're still mentally able, as it can be too late once you become incapacitated. Making sure that someone you trust can manage your affairs is the best way to ensure that your wishes are respected if something unexpected
What Are The Potential Risks You and Your Family Face, Without Having These Instruments In Place?
Without a Lasting Power of Attorney, uou put your family and loved ones in a very disturbing predicament
Vulnerability to Financial Abuse
Without an LPA, there is no one authorised to manage an individual’s finances if they lose capacity. This can leave them exposed to financial abuse from family members, carers, or strangers. The lack of a legally appointed decision-maker can also impede the timely management of their finances, which can result in financial difficulties or debts.
Unequal Distribution of Assets
If an individual loses their mental capacity and does not have an LPA in place, the court will appoint a deputy to manage their affairs. This decision may be based on who applies to become a deputy, and it may result in an unequal distribution of assets among family members or beneficiaries. This, in turn, can cause family conflicts or financial difficulties for those left behind, and it may not align with an individual's wishes.
Delay in Healthcare Decisions
An LPA for health and welfare allows the appointed person to make decisions about healthcare, living arrangements, and end-of-life care. Without this document, healthcare professionals may be unable to make decisions in a timely way, and families may argue about what an individual would have wanted. In these circumstances, doctors may need to apply to the court of protection, which can be expensive and time-consuming.
Higher Financial Costs
The court will appoint a deputy to manage an individual's affairs if they do not have an LPA. This process is not only time-consuming, but it can also be expensive, with costs for legal advice, court fees, and deputyship fees all adding up. These higher financial costs can erode an individual's savings and reduce the inheritance left to their beneficiaries.
Loss of Autonomy
Without an LPA, an individual loses control over who makes decisions on their behalf if they become mentally incapacitated. It may result in them being subjected to decisions that are not congruent with their wishes or values. As a result, they may lose their independence and their ability to live their life as they would have desired.
Inconvenience for Loved Ones
Family members or friends may need to apply to the court to become a deputy if their loved one does not have an LPA. This process can be long, stressful, and may take time away from their other commitments. Moreover, the court may appoint someone who does not know the individual’s wishes or values, which can add to family distress and tension.
Peace of Mind over Your Financial & Medical Affairs
By having an LPA in place, an individual can maintain control over their life and ensure that their wishes are adhered to, even in the event of a mental incapacity. It is essential to consult with a legal professional when drafting an LPA to ensure that it is comprehensive and tailored to the individual's needs.
“Lasting Power of Attorney More Important Than A Will”??
Martin Lewis, Money Savings Expert, has acknowledged, in his opinion that a Lasting ‘Power of Attorney is more important than a Will'!
It's important to remember that a Will is a very powerful and important Estate Planning tool which only becomes ACTIVE when a death event occurs. An attack on someone's mental health happens during someone's lifetime!
Someone suffering with a lack of mental capacity can live for many years and without the proper planning in place, could cause real frustration for family and loved ones.