Life can be unpredictable at the best of times, and we never know what the future holds. That’s why it’s important to plan ahead for the unexpected.
Putting a Lasting Power of Attorney (LPA) in place is one of the most effective ways to prepare for the worst, protecting yourself and your family should something happen to you.
This crucial legal document allows you to appoint an attorney who will handle your affairs if you are unable to, and it can be a huge benefit in a difficult situation. Unfortunately, the Actuarial Post reports that over 3 million over-75s are yet to put an LPA in place.
The good news is the government has recently reformed the LPA system so you can now apply online. This should make it quicker and easier than ever to appoint a trusted friend or family member to take care of your affairs.
Read on to learn how an LPA could protect you and your family.
It Lets You Choose Who Handles Your Affairs
If you fall ill or suffer a serious injury, you may not be capable of managing your own affairs. In this case, you might need somebody to take over for you and make decisions on your behalf.
It is crucial that you can trust the person who makes these potentially life-changing choices about your health and finances.
There are two different types of LPA you can put in place:
- Health and welfare LPA – This appoints somebody to make decisions about your health and medical care. This includes day-to-day care, medication and hospital treatment, and even life-sustaining treatments. They will deal directly with any medical and social care staff and communicate their decisions.
- Property and financial affairs LPA – This appoints somebody to make decisions about your property and finances. This may include collecting your pension, paying bills, managing your bank accounts, or buying and selling property.
You do not need to choose the same person for both, but you can if you want to. When you are deciding, it may be useful to consider who you trust, but also who is best suited to the role.
For example, a property and financial affairs attorney may need to deal with lots of admin, so it could be beneficial to choose somebody who is organised and already has a good knowledge of financial concepts.
Your health and welfare attorney, on the other hand, will likely have to make emotionally challenging decisions. As such, it is important to find somebody who can handle this and be decisive in a difficult situation.
By creating an LPA now, you can make a careful decision about who should manage your affairs. Consequently, the decisions that are made on your behalf may be more likely to align with your own wishes.
It Allows For Quick Decisions
If you become incapacitated and you have an LPA in place, your chosen attorneys can take over your affairs right away. So, all your bills are paid on time, your family can access your bank accounts, and there are no delays to important decisions about your care.
However, if you don’t have an LPA in place, there are no clear instructions about your wishes. As a result, your family can’t access your bank accounts or make decisions for you until they have applied to the Court of Protection, who will appoint a deputy to act on your behalf.
This can be a lengthy process, and it creates unnecessary stress for your family during a difficult time. Luckily, you can avoid this by putting an LPA in place now, so you are prepared.
It may also be useful to discuss details about your assets and what your care preferences are, for example. This means your attorney knows how you would like them to manage your affairs and they can set things in motion right away.
You Can Limit Disruption To Your Financial Plan
A serious illness or injury could potentially disrupt your financial plan if you are unable to work or make decisions about your wealth.
Fortunately, appointing an attorney may help you limit this disruption. They can make any necessary protection claims to maintain your income, for example. Additionally, they can continue making contributions to savings and investments on your behalf.
Consequently, you can still work towards your financial goals, no matter what happens.
It Creates Peace Of Mind For You And Your Family
Without an LPA, you don’t have a clear plan in place to deal with an unexpected situation in the future. This can leave you feeling vulnerable and apprehensive.
Meanwhile, when you appoint attorneys, you can be confident in the knowledge that you have trusted people to look after your affairs for you should something happen.
This peace of mind is incredibly valuable to you and your family so, if you don’t already have one in place, you may want to consider creating an LPA.
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This blog is for general information only and does not constitute advice.
The Financial Conduct Authority does not regulate estate planning.