A recent study by Scottish Widows revealed that although 95% of UK adults are aware of the concept of power of attorney and 75% believe it to be important, there is still a significant gap in understanding how the power of attorney legal document works and how to put it in to practice.
Furthermore, the research conducted during Free Wills Month in March 2023 discovered that power of attorney adoption rates are lower when compared to other forms of financial protection. For instance, 76% of individuals in a relationship have discussed wills and trusts with their spouse or partner. However, merely 41% of married couples have actually put a power of attorney in place.
Notably, Scottish Widows found that 24% of respondents reported having no intentions of setting up a power of attorney. As a result, millions of married couples are currently without a power of attorney, which puts them at risk of being unable to access their spouse’s finances if a critical situation were to occur. This lack of legal arrangement could prove incredibly challenging during emergencies or unexpected incapacitation, prohibiting spouses from handling financial matters or making decisions on health and welfare on behalf of one another.
What is a Lasting Power of Attorney?
A Lasting Power of Attorney (LPA) enables you to designate one or more individuals (your attorney) to make decisions on your behalf regarding your property, finances, health, and welfare. This arrangement takes effect if you become unable to make such decisions due to an accident or illness.
There are two types of Lasting Power of Attorney:
- LPA for Health and Welfare: This type of LPA concentrates on decisions regarding your well-being in the event of incapacitation or severe illness. It covers areas such as care provision, relocating to a care home, and determining the appropriate medical treatment.
- LPA for Property and Finance: This LPA focuses on managing your estate and assets if you become incapacitated or seriously ill. It encompasses tasks like handling your finances, settling, and paying bills, as well as selling or disposing of assets to generate funds.
Why should make a Lasting Power of Attorney?
Losing mental capacity without having an LPA in place can prevent your family and loved ones from making decisions on your behalf or managing your affairs. Joint bank accounts may even become frozen. In such cases, someone must apply to the Court of Protection for the appointment of a deputy to handle your financial matters, and this appointed individual may not align with your personal choice. This process can be both time-consuming and costly. Furthermore, in respect to health and welfare decisions, the Court will decide on your behalf; however, it will not interfere with any decisions made by an attorney appointed under a Health & Welfare LPA who acts in your best interests.
It is essential for couples to understand the significance of establishing a power of attorney to ensure that they can effectively manage each other’s finances or welfare decisions in times of crisis. Implementing this measure not only provides peace of mind but also protects both parties from potential complications that may arise in the event of an accident, illness, or other unforeseen circumstances.
Lasting Power of Attorney Solicitors
We provide comprehensive and unbiased guidance on selecting attorneys and establishing any limitations to prevent them from making undesirable decisions on your behalf. We also offer advice on the decisions you would prefer your attorneys make should the need arise.
To authorise your attorneys to use the LPA, it must be registered with the Office of the Public Guardian (OPG). To avoid potential rejection during registration, we believe it is crucial to have your LPA professionally prepared. A well-prepared LPA ensures it is not only accepted by the OPG but also recognised by banks and other institutions without any issues.
This blog post is not intended to be taken as advice or acted upon. If you are seeking legal advice, please contact our team of solicitors.