An article in the FT Adviser yesterday provided an interesting commentary on why investors should consider putting in place a Lasting Power of Attorney as part of the financial planning process.
If a person is no longer mentally capable of managing their affairs and does not have a LPA already in place, then those wishing to assist the incapacitated person, have to obtain a Deputyship Order through the Court of Protection in order to be able to assist with the management of property and financial decisions. Unfortunately, the Order can take many months to be granted by the Court, during which time the prospective Deputies only have a limited power to deal with that persons financial affairs.
Had an LPA been put in place and registered with the Office of the Public Guardian, the attorney's appointed within that power would be able to start attending to the management of the donor's affairs immediately.
In 2018, 800,000 LPAs were put in place, according to UK government figures, but this number is only a fraction of those who actually need one, according to IFA group Chase de Vere. "This is just the tip of the iceberg in terms of how many people should have an LPA," said Robin Bailey, an independent financial adviser in Chase de Vere’s personal injury & court of protection team. "Those who don’t have an LPA risk causing extra stress, concern and expense for their family and friends, while their own wishes about their finances or health might not be taken into consideration. "Most people don’t have an LPA because they don’t realise how important it is and how emotionally draining it can be for others if there isn’t an LPA in place when it is needed."