Why You Should Have A Lasting Power Of Attorney
Death and taxes are the two certainties in life, and Inheritance Tax (IHT) combines them both. Notorious for crippling many aristocratic families, especially following World War One, IHT now affects most people who own property, especially in the South East, due to the dramatic increase in house prices over the past 20 years.
Investing in careful tax planning will reduce the financial burden on your heirs, and ensure the wealth you have carefully built up over your lifetime, stays within your family.
The Coronavirus pandemic has brought into sharp focus how precarious life is. Those of us who enjoy full mental capacity cannot imagine life any differently. But as Coronavirus has shown, nothing in life is certain and our health can be compromised in an instant.
Having a Lasting Power of Attorney (LPA) in place can alleviate the stress of having to manage health and financial decisions if your mental capacity is compromised temporarily or permanently.
What is a Lasting Power of Attorney?
A Lasting Power of Attorney legally enables one person (an attorney) to make important decisions on behalf of another person (a donor). Such arrangements may relate to property and financial affairs and/or health and welfare.
The donor can nominate one or more attorneys, to act either 'jointly' (making decisions together), or 'jointly and severally' (whereby some decisions are made together, and some individually).
We tend to associate the loss of mental capacity with dementia and Alzheimer's disease; however, an accident or serious illness can strike anyone at any age. Whilst fighting the illness and during rehabilitation (in the case of an accident) or convalescence, having someone you trust manage your financial affairs allows to you focus on recovering.
The long road to wellness after Coronavirus
Even a medium case of Covid-19 can take months to recover from. One sufferer told The Guardian:
"My biggest concern is that there is little visibility into the reality of what recovery truly looks like, as recovery from a medical perspective simply means that the patient 'did not die' and simply does not capture the lingering and painful symptoms that the Covid-19 recovery road truly entails for some or many."
For those admitted to intensive care and placed on a ventilator – recovery, should they survive, takes up to one year. Coronavirus assaults the body in several ways; it targets the lungs, but a lack of oxygen can also damage the kidneys, liver, heart, brain, and other organs. Furthermore, those who spend time in ICU may suffer a range of physical, cognitive, and mental health symptoms, collectively called post-intensive care syndrome. And doctors are finding that delirium, which can lead to long-term cognitive impairment, is rife in severely ill Coronavirus patients.
Here are three ways that having an LPA can benefit you when recovering from a severe illness such as Covid-19 or an accident.
One – People that you trust and have personally appointed can make decisions on your behalf
Appointing an attorney is a crucial decision and one that should not be hurried. Most people choose close family members or friends (you can have up to four attorneys). However, if your affairs are complex, you may feel more confident appointing a professional advisor.
Your Solicitor will explain the duties and responsibilities of an attorney and provide advice on how to select the best person. The beauty of an LPA is that once you have made your choice, you can relax in the knowledge that if you did become mentally incapacitated, someone you trust is taking care of your investments, properties, business, and, if you have a health and welfare LPA, decisions regarding your treatment.
Two – Under an LPA an attorney cannot exceed the power you give them
When you set up a health and welfare or financial LPA, you not only appoint your attorneys, you also decide the extent of their power. For example, you may want to empower a family member attorney to pay your bills but leave the managing of your buy-to-let portfolio to a professional adviser.
Three – Your loved ones can access money and ensure your affairs are quickly taken care of
If you become mentally incapacitated, your loved ones will be adversely affected and will face the stress of your recovery alongside you. By having an LPA in place, you can reduce their worries because, if they are appointed as an attorney, they can access your bank account and ensure the household and any business bills are paid. Furthermore, they can ensure rents of properties are collected and, in the case of a health and welfare LPA, be confident in any decisions they make concerning your treatment.
In summary
Do not leave the management of your affairs to chance. Regardless of your age and health, it is vital to have a valid Will and LPA in place to protect you, and those you love should the unimaginable happen.
Guillaumes LLP Solicitors is a full-service law firm based in Weybridge, Surrey. We have a highly experienced private client law team who can assist you with your LPA matters. To make an appointment, please call us on 01932 840 111.