Most people appreciate the benefits of having a Will (even if they don’t currently have one in place!)- after all, who doesn’t want to control what happens to their property after they’ve died? Unfortunately, the majority pay little or no attention to the often- forgotten cousin of the Will; the Lasting Power of Attorney (or LPA for short).
LPAs are there to assist in the event that you lose the capacity to manage your own affairs. These useful documents allow you to nominate trusted friends or relatives to step into your shoes and manage your financial and health- related affairs in the event that you are no longer able to do so.
LPAs are often misunderstood and underappreciated, with most people not making them at all. With this in mind, here are the top 5 misconceptions that people hold about LPAs:
- 1. ‘LPAs are an expensive waste of money. I’ll get my family to make one for me if and when the time comes’
Unfortunately, if you have already lost the capacity to manage your own affairs you will not be able to make LPAs. They have to be in place before the time comes.
- 2. ‘I don’t see the point in paying a professional to draft my LPAs. I can fill in the forms myself online’
Whilst it is true that you can do your own LPAs online, this is fraught with risk. The documents may appear straightforward but there are many pitfalls for the unwary. A professionally drafted LPA will include a number of additional clauses which increase the utility of the document far beyond that of a homemade version. In addition, most people appreciate the peace of mind that comes with seeking professional advice, and don’t forget, professionals are insured if things go wrong!
- 3. ‘My Husband/ Wife and I hold everything in our joint names. We don’t need LPAs’
This is a common misconception that trips up many people. If you or your partner lose the capacity to manage your own affairs without having an LPA in place then any jointly- held bank accounts will have to be frozen whilst an expensive application is made to the Court of Protection to sort things out.
- 4. ‘Next of Kin are able to help out without the need for an LPA’
This is another common misconception that can land people in a lot of trouble. The term ‘Next of kin’ is worthless legally. Regardless of your relationship to the person who has lost capacity, you are not able to help them unless there is an LPA in place appointing you.
- 5. ‘Even if I lose the capacity to manage my own affairs without having LPAs in place, the consequences aren’t THAT serious’
If you lose the capacity to manage your own affairs and you DON’T have LPAs in place then the consequences can be financially and emotionally disastrous. Your nearest and dearest will have to make an application to the ‘Court of Protection’ for help. This can take many months and costs can run into the thousands of pounds, placing your loved ones under a huge strain. At the end of proceedings, the Court of Protection can appoint whoever they think fit to manage your own affairs, and can even appoint an independent ‘Panel Deputy’. We wouldn’t wish this on anybody which is why we strongly recommend that you have LPAs in place.