IFA Magazine recently reported that more than 1 million Brits registered a Lasting Power of Attorney (LPA) in 2023. This marks a record high and the first time annual LPA registrations have reached six figures.
LPAs can provide peace of mind that your affairs will be looked after if an accident or illness means that you are no longer able to. You’ll know that your money and care are in safe hands and that you’ve helped spare your loved ones from spiralling costs and unnecessary delays.
Keep reading for a closer look at the types of LPA available, why now might be the best time to set one up, and the three main benefits of doing so.
There are two main types of LPA covering the areas of your life that you might need help with
An LPA is a legal document that lets you appoint a person (or people) you trust to make decisions on your behalf if you are no longer able.
You might be worried about what would happen to your finances if you lost the capacity to manage your wealth. Or be concerned about the potential effects of an accident or debilitating condition like dementia, and the impact it would have on your ability to look after yourself day-to-day.
Two main LPAs cover both these eventualities. You’ll need to decide which is right for you and give serious consideration to the merits of having both. After all, they cover very different elements of your life.
The two main LPA types are the:
- Health and Welfare LPA covering your daily routines like washing and dressing, at-home care, and medical treatment.
- Property and Financial Affairs LPA covering selling your home, managing bank accounts, and paying bills.
As you can see, you might opt to have both to ensure all aspects of your life are covered, should the unexpected strike.
3 compelling reasons why you need an LPA now
1. An LPA puts you in control and gives you peace of mind
You choose your attorney (or attorneys) and then register your request with the Office of the Public Guardian. This usually costs £82 (or £164 if you opt for both types of LPA) and will take around 20 weeks. Once this is done, you know that your affairs will be looked after whatever the future brings.
You can put an LPA in place at any time after your 18th birthday, although you must have the mental capacity to make your own decisions. It can also be cancelled at any time if you no longer need it or want to make a new one. Again, you’ll need the mental capacity to make that decision.
Because you name the attorneys yourself – and can even specify the exact types of decisions they have the power to make – you’ll always be in control.
2. It will save your loved ones unnecessary stress
If you have an accident or are diagnosed with an illness, this will be incredibly stressful for you. It will also be a difficult time for your loved ones. They might find themselves in charge of managing your health and treatment, with your household bills to pay and finances to manage.
An LPA can make this process quick and easy, seamlessly handing over the power to act on your behalf.
Not only will this avoid conflict and difficulties, but your chosen attorney will know that they are authorised to make the decisions they need to make, and your loved ones will know the actions being taken are in line with your wishes.
3. It can save time and money
While the cost and process time of appointing an LPA might be off-putting, the alternative is more expensive and time-consuming.
If you become incapacitated without an LPA in place, your family will need to apply to the Court of Protection for a deputy to be appointed.
The fees for this include:
- £408 as an application fee (as of May 2024) doubled if you are applying to be a personal welfare and a property and financial affairs deputy
- £494 if the court decides your case needs a hearing. A further charge could be incurred if you’re asked to set up a security bond
- £320 a year as an ongoing general supervision fee, reduced to £35 for minimal supervision
- £100 for an assessment fee if you’re a new deputy.
On top of the spiralling costs, the process also takes time, usually between four and six months. This is likely to be a hugely stressful time for your loved ones.
Recent LPA changes make now the perfect time to put an LPA in place
The recent 1 million-plus peak in LPA registration had several causes. As well as a surge in registrations during Covid, and an easing of the subsequent backlog, earlier diagnosis of dementia is also said to be a contributory factor.
The main reason, though, is likely to be recent changes that have moved large parts of the process online. This has made registering an LPA much easier. With further changes in the pipeline, now might be the perfect time to think about who you’d appoint to look after your affairs.
Get in touch
If you’d like to discuss appointing an LPA or you have any questions about protecting your wealth from unexpected shock, get in touch. Contact us now to find out how our Chartered financial planners could help you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
