Since the start of the Coronavirus Pandemic it has been awful to see so many individuals suffering. With lock down in place and self isolation being imposed, it isn’t just the elderly or vulnerable that are struggling to deal with the day-to-day. Many people, otherwise regarded as being fit and healthy have been struck down by this deadly disease. Unfortunately, the team at Simple Will are seeing increasing examples of people being hospitalised and left temporarily unable to manage their finances. The last thing they need is a handful of late payment notices and fines when they return home.
The good news is there is something you can do to avoid this unnecessary stress and heartache. Today, we’re going to be talking about Lasting Power of Attorney or LPAs and why they are so important for you and your loved ones during a time of crisis.
What is Power of Attorney?
Power of Attorney is a legal document. It gives a person you have nominated the power to act on your behalf. There are two main types:
- Power of Attorney: Gives someone the ability to manage your finances while you’re in hospital or become unable to get out and about.
- Lasting Power or Attorney: Also known as LPAs allows someone to make decisions about your finances, property, health and care. It comes into effect if you lose the physical or mental capacity to make your own decisions.
Why is Power of Attorney Important?
If you became ill or have an accident that left you physically or mentally incapacitated it would be virtually impossible for family or friends to sort things out for you. They may need to continue paying bills on your behalf or pause and cancel subscriptions. There may even come a time when they might need to sell your home to pay for ongoing care. However, while you’re alive the law dictates that they won’t be able to gain control of your finances.
In instances like this, your loved ones would have to apply to take charge of your finances through the Court of Protection. This is often a complicated and costly. This can be a really distressing time for friends and family especially when already trying to process your illness. Worst still, if they can’t legally manage your affairs or access your money they could be left paying huge sums of money for your ongoing care.
With a Lasting Power of Attorney in place you can be sure that there will be someone with the appropriate power to sort things out on your behalf.
When is the best time to set up a Lasting Power Of Attorney?
Because LPAs can only be set up when you’re of sound mind, the best time to set one up is right now. If you’re over 18 and still have the mental capacity to make decisions then you’ll be able to put this in place. Don’t forget that the legal powers of your attorney will only come into effect in the event that you are unable to look after yourself.
Home ownership is probably the biggest asset for a lot of people. This is why we’d recommend setting up an LPA when you take out your mortgage. However, Martin Lewis from Money Saving Expert suggests that any grown up with any assets should put one in place. He even goes as far to say that LPAs are as important, if not more important than making a Will and succession planning.
How to set up a Lasting Power of Attorney?
Information about setting up an LPA can be found on the GOV.UK website. However, if your estate is complex i.e you have a business, properties abroad or multiple accounts, bonds or trust, then it is always best to get advice from a professional. Solicitors can help with LPAs but can be an expensive option. Instead, approved legal and financial advisers, like Simple Will set this up for you. We help our clients to understand their options. We support them through the process and help them to make the best financial decisions.
Need Help Getting an LPA in Place?
What this Pandemic has taught us is that illnesses and accidents can strike at any time. Additionally, your illness could leave your loved ones responsible for any expenses incurred during your period of incapacity. It’s therefore time to get organised!
Although it’s impossible to predict the future, we can plan for it, and Lasting Power of Attorney is an essential way of ensuring that someone can manage things on your behalf when you’re unable to look after yourself.
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