SET UP A LASTING POWER OF ATTORNEY

If there is one thing the pandemic has taught us, it’s that none of us knows what lies around the corner, especially when it comes to our health. Setting up a Lasting Power of Attorney (LPA) for Property and Financial Affairs protects you and your family if you ever lose the mental capacity to look after your finances yourself – for example, if you were to fall into a coma or suffer a brain injury.

An LPA enables you to legally appoint someone you trust to make decisions when you can’t and to act in your best interests, for example by paying your mortgage and your bills. They can even rent out or sell your property if funds are required for your care. Similarly, if your spouse, relative or friend appoints you as their attorney and then they become incapable of managing their finances and savings, you will be able to use the LPA they set up to access their bank accounts and savings to pay any necessary bills. You will also be able to continue to use any joint accounts and manage any joint assets you share with them, all by yourself.

Without an LPA in place, managing someone’s finances is far harder – as anyone who has tried to talk to a utility provider on behalf of an elderly parent will know. And if it’s your partner who becomes incapacitated, not having an LPA could leave you financially vulnerable. Recently, the TV presenter Kate Garraway gave a frank and moving interview about the financial difficulties she faced while Derek, her 54-year-old husband, was in hospital for more than a year with Covid-19. She could not access his bank or credit-card accounts, their joint savings or refinance the mortgage, even to pay for Derek’s medical care. An LPA would have allowed her to do this.

‘Anyone with a joint bank account should have an LPA, because without one, the bank can severely restrict usage of the account to protect the interests of the person who has lost capacity,’ says Malcolm Roberts, an adviser at LPA Now. ‘You can set up an LPA at any age and there is really no good reason to go through life without one.’

When no LPA has been set up, the Court of Protection has the power to appoint a deputy – such as a family member or a close friend – to handle the financial affairs of the person who is incapable of managing their money. Unfortunately, to gain this important status of deputy after your loved one has become incapacitated, you will need to make an application to the court and that is a more expensive and time-consuming process than setting up an LPA.

Legally appoint someone you trust to make decisions when you can’t