With increasing numbers of us living well into old age, more and more of us will suffer from dementia or other conditions that can leave us unable to make financial decisions for ourselves.
As many of us look to our future, we must ensure we have the protections in place to maintain effective control of our investments, wealth and finances – or have a person in place to achieve this for us.
That is where Lasting Powers of Attorney (LPAs) come in. An LPA enables you to nominate someone you trust to take important decisions on your behalf if you lose your mental capacity.
Who needs an LPA?
While an LPA might seem like something that only older people need to give serious thought to, the reality is that anyone at any age could fall victim to an accident or illness that takes away their capacity to make decisions for themselves.
Anyone could be in a position where they need someone to make crucial medical decisions on their behalf.
Similarly, anyone with assets or dependents could be in a position where they need someone to make decisions for them.
What kinds of LPAs are available?
There are two forms of LPAs, and you can set up one or the other, or both, depending on your preferences and needs.
Health and Welfare LPAs allow the person you nominate as your attorney to make medical and welfare decisions for you.
Meanwhile, Property and Financial Affairs LPAs allow the attorney to make decisions relating to your assets and your finances.
It is important that you consider drafting both forms of LPA to ensure your needs are met should you lose the capacity to act on these matters.
Although LPAs are often created later in life, it is worth having one in place when you create a Will to make sure your best interests are protected.
Why you need an LPA
Most, if not all, financial institutions will refuse to deal with anyone other than the account holder, joint account holder or an appointed attorney.
This means that your family might be unable to manage or access your finances should the worst happen, which could make lives difficult for them and for you.
Even some joint accounts can require both or all the account holders to sign for any changes, potentially locking a spouse or partner out of the household income.
If you lose capacity without an LPA in place, then your loved ones will have no say over medical decisions or access to your finances unless they are appointed as Deputies by the Court of Protection – a potentially time-consuming and expensive process.
In this situation, you would have no say over the person making decisions on your behalf and they might not be someone you would choose or even trust to put in that position.
Who can I appoint as an attorney?
Anyone over 18 who has the capacity can be appointed as an attorney. You can also appoint professionals, such as lawyers or financial advisers, as attorneys.
You can have more than one attorney for each type of LPA, and they do not have to be the same for each type of LPA.
You can also have reserve attorneys who can act where a person you nominate is unable to act on your behalf.
Why does an LPA matter to my investment and wealth strategy?
As mentioned, without an LPA your family will not be able to act on your behalf when it comes to the management of your savings and investments. This could lead to you missing out on new opportunities to manage your wealth effectively and limit the amount of support that is easily accessible to help with your care and maintain your family.
Many investors choose to appoint their independent financial adviser as one of their attorneys to ensure that their assets continue to grow and support their needs and those of their families.