Do you understand how a Lasting Power of Attorney works, what an important document is and how to arrange one? We take a look at some facts about power of attorneys and what is involved.
What is a Power of Attorney?
A Power of Attorney (POA) is a legally binding document which allows you to grant legal power to someone else so that they can make financial decisions for you when you may not be able to. This may occur when you lose the mental capacity to do this yourself.
The Different Types of POA
Within the Power of Attorney set up there are different types:
- Ordinary or General – this allows you to give temporary power of attorney to someone if you have to go into hospital for example and are unable to carry out certain tasks while out of action. This type of POA is only applicable while you have the mental capacity to make decisions for yourself.
- Lasting – a Lasting Power of Attorney (LPA) is a longer term solution for when you no longer have the mental capacity to make decisions for yourself.
There are two types of LPA – property & financial and health & welfare
- Property and financial affairs -allowing the attorney to make decisions about things relating to property and finances.
- Health and welfare – allowing the attorney to make decisions pertaining to health treatments.
When to set up an LPA
The danger with this is, you may leave it until it’s too late. In fact, it’s never too soon to create a lasting power of attorney but you must be sure about who you give that power to.
Many people are unsure as to who to give the power to and this is possibly the most important decision. It doesn’t have to be a spouse or partner. It could be a son or daughter (as long as they are over 18) but it could be one of the following:
- Family member – sibling, nephew, niece, son or daughter etc
- Friend – a close friend that you trust to make the right decisions for you
- A professional – a solicitor for example
Don’t assume that a loved one is the best choice. Sometimes, and unfortunately, this could leave you vulnerable to financial abuse. It can be all too easy to trust someone and be blind to possible consequences. Who is to say that the person is good with money or doesn’t have money issues of their own – a gambling problem for example.
A lasting power of attorney is a powerful document! Much more so than a will and should be undertaken with much thought and careful consideration.
How long does it take?
It takes time to arrange an LPA – up to five months to be precise. This is the warning from The Office of the Public Guardian (OPG), who are responsible for processing POA applications. They say you should allow up to 20 weeks for your application to be processed.
How to arrange a Lasting Power of Attorney
You can do it yourself or through a professional. The cost to register an LPA in England and Wales is £82. Of course, using a professional will carry extra costs however, you are paying for peace of mind that you have conducted the process properly.
Act before it is too late
Once you lose capacity it is too late which is why you should arrange an LPA sooner rather than later. While you may be in perfect health none of us know when illness will strike.
At Buzz Financial, our team are equipped and experienced to help you arrange an LPA. We have handled many for our clients and can do so with care and sensitivity. Get in touch to see how we can guide you through the process.