Lasting Power of Attorney – why is it so vital?
A Lasting Power of Attorney (LPA) is a legal document that lets you (the ‘donor’) appoint one or more people (known as ‘attorneys’) to help you make decisions or to make decisions on your behalf.
Basically, a LPA allows you to nominate who has control over what happens to you as and when you become unable to look after yourself.
There are two sorts of Lasting Power of Attorney, one covers your personal issues (Health and Welfare) whilst the other allows your attorney to help you to manage your financial matters (Property and Financial Affairs).
The LPA works to your benefit if, for example, you have an accident or an illness and can’t make decisions at the time, or if for other reasons, you no longer have ‘mental capacity’ to make prudent decisions on your own.
You must be 18 or over and still have the mental ability to make your own decisions when you make your LPA. This is a classic “chicken and egg” process – if you wait until you are no longer compos mentis, or physically able to make decisions on your behalf, it will then be too late to appoint someone to be your attorney.
We often encounter situations where we feel that by appointing someone as our attorney we have somehow reached the point where we risk losing our independence. We therefore continue to dismiss all requests from well-meaning relatives to help us. This is a real shame as it is definitely in our own best interest to have a competent and trusted attorney in place before we start to have problems when we get old.
Unfortunately it seems that the older we get, the more stubborn and closed we become to accepting help which is often a symptom of the changes in our thinking that occur in our brains as we age.
How is an LPA created?
This is a three-stage process:
- First, you must choose your attorney – the person who will have control over your affairs – and you can have more than one.
- Secondly, you will need to complete the relevant forms to appoint them as an attorney, and finally..
- You will need to register your LPA with the Office of the Public Guardian (this can take up to 10 weeks).
You will need to register both LPAs (Health and Welfare and Financial Affairs) if you want to cover all potential scenarios and the current registration fee will be £82 for one or £164 for both. If you receive certain means tested benefits when you apply to register it you should get exempted from all of the fees.
These benefits are:-
1. Income Support
2.Income-based Employment and Support Allowance
3. Income-based Jobseeker’s Allowance
4. Guarantee Credit element of State Pension Credit
5. Housing Benefit
6. Council Tax Reduction/Support – also known by other names (not the 25% single person discount or the Class U exemption)
7. Local Housing Allowance
8. A combination of Working Tax Credit and at least one of:
–Child Tax Credit
–Disability Element of Working Tax Credit
–Severe Disability Element of Working Tax Credit
Note that the following benefits do not qualify: Disability Living Allowance, Invalidity Benefit or Personal Independence Payment
If your income before tax is less than £12,000 a year, you’ll only have to pay half – this is known as a ‘50% remission’.
Although setting up and registering an LPA yourself can be done if you are organised and accurate, most people tend to outsource this to experienced professionals. It can take 10 weeks to get an LPA through the registration process and if just one small error is made when completing the form then it will be rejected and sent back. You will then have to start from scratch, correct the errors and submit the form again. I know from bitter experience how frustrating this can be!
Please note that there are different processes for registering LPAs in Scotland and Northern Ireland.
About Jon Pryse-Jones
Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.
An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”
Jon’s appreciation for THP extends to his fellow team members and the board. “They really know how to run a successful business,” he says. He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.