Key component of retirement planning
Putting Lasting Power of Attorney’s (LPAs) in place is a core part of any retirement plan and something we advise all clients do, early on in our relationship.
It’s good news that record numbers of people are formally assigning emergency decision-making to those they trust with a Lasting Power of Attorney. 726,000 people handed over control of their affairs to those they trust in 2016 alone and the figure has grown by 180 percent in the last 5 years alone.
I find that there’s a lot of confusion around LPAs and the complexity involved in setting one up properly often deters people from doing so.
I interviewed Fiona Heald, in episode 009 of The Retirement Café Podcast all about Lasting Powers of Attorney. You can listen to the full interview here on iTunes or here on our website. Here’s a summary of our interview.
All about Lasting Power of Attorneys
In this episode, Fiona explains that all Power of Attorneys created today are Lasting Powers of Attorney. There are two main types of LPA: Property and Financial Affairs, and Health and Welfare. The former enables someone else to deal with your money and financial affairs in the event you’re unable to do so. This can be set up and implemented whenever you wish – including whilst you still have mental capacity. You decide when you wish this to be used, but, for example, it can be used if you become ill abroad and need someone to access your bank account in the UK, or you become housebound. You don’t have to have lost mental capacity for the Property and Financial LPA to be used.
The Health and Welfare LPA allows someone to make decisions about your care, hospital treatment and ongoing lifestyle, but is only ever activated if you lose mental capacity. This LPA confers more decision making powers to your attorneys, which means deciding how they are able to act is important to get right.
Prior to 2007 there was one Power of Attorney called an Enduring Power of Attorney, which just dealt with Property and Finance. If you have one of these, it’s still valid, but you also need to put in place a Health and Welfare LPA.
Fiona points out how it’s important to include your spouse or partner as an attorney when setting up your LPA, as well as any children you choose. It’s important to ensure that the person or people you choose have time and are well placed to take on this important role. They need to be well organised, capable of taking on the responsibility and be trustworthy.
Solicitors can act as attorneys, but there will be costs involved, so Fiona advises that solicitors are appointed as a last course.
Once you’ve selected your attorneys, you then need to decide how you want them to act, including whether you wish to give them powers around end of life decisions. They have to sign to accept the responsibilities you ask them to take on.
The process of creating and registering your LPAs can take 3 – 5 months, so you need to plan well in advance. The cost of registration for each LPA is £82. Subsidies are available for those who can prove they have limited income.
Fiona believes that everyone should set up LPAs before having their first legal drink at age 18! LPAs are such important documents that we both advise really strongly taking the time to do so. Especially as we age.
About Fiona Heald
Fiona Heald is a partner in the Court of Protection team at Moore Blatch Solicitors. She looks after the interests of vulnerable people and where appropriate their carers, helping them deal with the issues that arise in later life. Mental incapacity and care fees issues take up most of Fiona’s time.
Fiona ensures her clients’ wishes are met both now and in the future, which involves putting in place the necessary arrangements and legal structures. This is a highly specialised area of law, requiring not only expert legal advice but also the ability to understand the emotional issues that arise.
Fiona has seen demand for these personal services grow dramatically, as we live longer but not necessarily healthier lives.
She is a member of the Society of Estate and Trust Practitioners (STEP), Treasurer for the South Central branch of Solicitors for the Elderly and a Dementia Friends Champion.