What is a Lasting Power of Attorney and why should you make one?

Imagine your aged mother is not keeping well, and she asks you to go to the bank on her behalf to withdraw a relativly small amount for her shopping requirements. Given this scenario, people just like ourselves are constantly annoyed by banks refusing to make such withdrawals. Nowerdays, the bank will require a letter of authorisation from your mother for the transaction. With all the money laundering legislation these days, this will happen more often in the future - much more than we can imagine.

A Lasting Power of Attorney (LPA) is a means by which you can give someone authority over your property and financial affairs in the event of your incapacity. It is a legal document appointing a person or persons of your choice to be your attorny(s).

From the 1st of October 2007, LPA's have replaced Enduring Powers of Attorney (EPA) in England and Wales. LPA's are governed by the Mental Capacity Act 2005. YOU ARE NO LONGER ABLE TO MAKE AN EPA.

The two different types of LPA:
1. A Property and financial affairs LPA

This is similar to the old EPA. This allows you to choose someone you trust to manage or make decisions about your financial and property on your behalf should you be unable to do so yourself through accident, illness or simply old age. Your attorney can operate a bank account or accounts, make investment decisions, sign tax returns, purchase or sell a property on your behalf.

This power can operate solely from the onset of mental incapacity or your attorney can manage some or all of your property and financial affairs on your instructions whilst you still have capacity.

If there are power's you do not wish your attorney to have, you may place conditions and/or restrictions in the LPA document.

The foresight in setting up an LPA can save you and your estate thousands of pounds in unwanted legal costs and also save a great deal of time so that your trusted attorney(s) can control your estate from the day it is needed and do not have to wait months for a date to submit an application to the courts.

2. A personal health and welfare LPA

This is new and allows you to choose someone you trust to make decisions on your behalf relating to your personal health and welfare. These decisions may include giving or refusing consent to medical care and treatment in circumstances where you the donor has lost the capacity to make such decisions for yourself. Any decisions can only be taken on your behalf if your attorney believes that you lack the capacity to make the decision yourself.