Gemma Hughes

By Gemma Hughes, Senior Associate and the Head of our Private Client Team

Managing a person’s affairs when they lose capacity can be a challenging and distressing process but being in that situation without any legal documentation to support you can add additional stress, time and expense.

The financial expert, Martin Lewis, has highlighted the importance of doing Lasting Powers of Attorney (LPAs), not only to ensure someone is appointed to manage your affairs but also to advise that the cost of registering an LPA is only minimal – currently £82. Failing to have these documents in place could result in substantially higher costs if you are required to go via the Court of Protection.

His message is a stark reminder of the risks of not preparing for potential future incapacities through the preparation, and putting in place, of these important documents.

Risks of not having an LPA

As has been made clear by Martin Lewis, there are significant potential dangers in not having an LPA, these include:

  • Loss of financial control: Without an LPA, if you become incapacitated, your loved ones cannot legally access your finances to pay for your care or other necessary expenses. This situation can create significant financial strain.
  • Financial costs: The cost of registering an LPA is £82 in England and Wales, which is significantly lower than the costs associated with applying for a deputyship through the Court of Protection, which also involves yearly fees.
  • Emotional stress: The process of applying for a deputyship via the Court of Protection is not only long and intrusive, but also adds emotional stress to your family during an already difficult time.
  • Delay in decision-making: The absence of an LPA can lead to significant delays in decision-making, impacting the well-being and financial stability of the individual concerned.

The necessity of an LPA

An LPA is a legal document allowing you to appoint one or more individuals, known as Attorneys, to manage your affairs if you are unable to do so.  These individuals can act for you if you lose mental capacity but also if you are ill or injured – permanently or temporarily.

There are two types of Lasting Power of Attorney (LPA) – one for property and finances, and the other for health and welfare. You are able to appoint the same people for each document or different people for each document which allows you to ensure that the most appropriate people are appointed for each function.

Property and Finances LPA

By appointing an attorney for property and finances, they will be able to assist you in managing various aspects such as:

  • Managing bank accounts
  • Handling money, bills, and taxes
  • Overseeing pensions
  • Managing properties and investments

When you are appointing an Attorney, you have the option to decide how they are going to act for you – with your consent while you have capacity or only when you lose capacity.

Health and Welfare LPA

For decisions concerning your health and welfare, you can appoint the same people, or you can appoint different ones. This attorney(s) will have authority over decisions including:

  • Your living arrangements
  • The type of care you receive
  • Giving or withholding consent for medical treatments

It’s important to note that this type of LPA comes into effect only if you are no longer able to make your own decisions about your personal welfare.

As highlighted by Martin Lewis, an LPA is an essential part of financial planning which is, arguably, as important as preparing a Will.

It ensures that your affairs can be managed in your best interests even when you are not in a position to do so yourself.

We strongly advise considering putting in place LPAs to safeguard your future and ease the potential burden on your loved ones.

Speak to our Senior Associate and Head of our Private Client Team, Gemma Hughes by emailing or calling 44 (0) 20 7240 0521