Lasting Powers of Attorney - Separating Fact from Fiction
When we ask clients if they have a Will, the answer is usually yes. Ask about Lasting Powers of Attorney (LPAs), and the answer is often different. That’s understandable - Wills feel essential, while LPAs are often pushed down the to-do list. But they’re just as important, and sometimes more so.
Here are some of the most common misconceptions we come across.
Misconception 1: “I’m too young to need a Lasting Power of Attorney.”
LPAs aren’t about age; they’re about being prepared for the unexpected. A serious illness or accident can happen at any stage of life, and once you reach adulthood, even your parents, spouse or partner cannot automatically make financial or healthcare decisions on your behalf. If you lose mental capacity without an LPA in place, those closest to you may not have the legal authority to act, regardless of how well they know your wishes.
Misconception 2: “My family can just deal with everything.”
Many people assume that their family could simply contact the bank, speak to their financial planner or manage investments if they became unable to do so themselves. In reality, banks, investment providers and other organisations have legal obligations to ensure they are taking instructions from someone with the appropriate authority. Without an LPA, family members may find themselves unable to deal with even relatively straightforward matters.
Misconception 3: “I don’t have enough assets to need one.”
LPAs aren’t just for people with substantial wealth. They can be just as important for managing everyday finances as they are for overseeing investment portfolios, property, trusts or business interests. Whether it’s paying household bills, completing a tax return or making decisions about investments, or even paying off a student loan, an LPA allows someone you’ve chosen to act on your behalf if you’re unable to do so yourself.
Misconception 4: “I can always sort one out later.”
This is one of the biggest risks. An LPA can only be created while you still have the mental capacity to understand and sign it. If capacity is lost before one is in place, your family may need to apply to the Court of Protection to be appointed as your deputy—a process that can take months, involve additional costs and create unnecessary delays at an already difficult time.
Misconception 5: “It’s the same as having a Will.”
Although they’re often discussed together, they serve entirely different purposes. A Will sets out what happens to your estate after your death, whereas an LPA protects you during your lifetime if you’re unable to make decisions yourself. There are two types: a Property and Financial Affairs LPA, covering matters such as bank accounts, investments and property, and a Health and Welfare LPA, covering decisions about care and medical treatment. Most people choose to have both.
Misconception 6: “Once I’ve done it, I never need to think about it again.”
Like a Will, an LPA should be reviewed from time to time. Relationships change, families grow and circumstances evolve. Someone who was the right choice to act on your behalf ten years ago may not be today. Reviewing your LPAs periodically helps ensure they continue to reflect your wishes and that the people you’ve appointed remain the right people for the role.
Planning ahead
None of us likes to think about a time when we may not be able to make our own decisions. However, putting Lasting Powers of Attorney in place isn’t about expecting the worst—it’s about making sensible preparations. Alongside your Will and wider financial planning, an LPA helps ensure that, if the unexpected does happen, the people you trust have the legal authority to act on your behalf.