You may not realize it, but a Lasting Power of Attorney is probably as important a document as a Will. What’s a Lasting Power of Attorney?
A Durable Power of Attorney is a legal document that authorizes one person to act on behalf of another person in financial and legal matters. It is called “Durable” because it remains valid after the person granting the power has lost his or her mental capacity; this is when a Power of Attorney is most often needed. The person who is given the power is called an Attorney-In-Fact.
It’s a good idea to set up a Lasting Power of Attorney (LPA) now, while you’re in a position to do so, as it means the right people will be ready and willing to look after you and act in your best interests.
If you go on to lose mental capacity (which for someone with dementia, is a highly likely symptom), these people will be able to make decisions for you.
If you don’t set up an LPA before you lose mental capacity, then family members will need to go through the Court of Protection to appoint a deputy to manage your affairs – a process which can be decidedly more complex, long-winded and expensive. What’s more, it could mean a stranger (such as an accountant or lawyer), and not your loved one will have to make every decision for you. You cannot set up a Lasting Power of Attorney for someone if they have already lost mental capacity.
What happens if you don’t make a Lasting Power of Attorney?
It’s not a legal requirement for everyone to make a LPA, but it’s definitely a good idea. If there is nobody with the legal authority to manage your affairs – for example accessing your bank account or selling your home – then the person who you would want to do this will need to apply to the Court of Protection.
This is a legal body set up through the Mental Capacity Act which makes decisions for people who are lacking mental capacity. The Court will appoint deputies – one for property and financial affairs and one for personal welfare – who will then make decisions for them.
How do you appoint a Durable Power of Attorney?
1 Appoint an Agent. For may people this is a family member or close friend.
2. Contact an attorney to write up the documents.
3. Fill out the durable power of attorney form/forms. Name your agent and any alternate individuals to handle your affairs in the event that your current agent cannot do so. You cannot use one document as both a financial and medical power of attorney; you must execute two separate power-of-attorney documents — one financial and one medical — if you want an agent/agents to handle your financial transactions and carry out your health care decisions. You can also place limitations on your agent in either case if you so choose.
4. Specify a time frame for the document. Durable power of attorney privileges generally go into effect immediately, but you can prevent this from occurring by setting a specific date that you want the document/documents to take effect. You can also specify a termination date if you wish.
5. Make a checklist of rights, responsibilities and limitations your durable power of attorney should reflect.
6. Make two copies. one for you and one for the agent and sign both in front of a notar.
That’s it. Pretty easy and you get peace of mind knowing somebody you trust will be in charge should you become unable to handle your affairs.