Living Wills & Lasting Powers of Attorney

A study and research by the Alzheimer ’s Society reported that more than 1 million people living in the UK would have dementia by the year 2025. Their study also shows that 1 out of 5 people who are older than 85 years old already have dementia. This is an alarming figure, specifically for those who have not managed their finances before they became ill. This further stresses the importance of planning in advance for the sake of your family as a Will may not be possible if you aren’t deemed of sound mind when you apply to create one.

However, this does pose a problem if you are unfortunate enough to be the victim of early onset dementia. Throughout your life, naturally, your priorities will change, and you may start to rely on different relationships and people in your life. Normally, this could require a change in your Will to amend the beneficiaries so that the people you now hold dear are the ones who will be entitled to your estate. But, if you aren’t accepted as well enough to update your Will later down the line, then your estate may be legally tied to people who are no longer your chosen benefactors.

In this case, it is possible to assign someone to have a “lasting power of attorney” (LPA) who can make decisions on your behalf in case of illnesses like dementia. The LPA is a legal document that gives the person of your choice the authority to oversee your finances for you.

It’s a misconception that your next of kin will automatically be able to manage all of your finances if you are mentally incapable. If you don’t elect a POA, then your decisions will be made wholly by the state. This could mean that they are for the benefit of your care and what’s best for the care provider, not necessarily your loved ones.

There are two kinds of LPAs, namely:

1. Health and Welfare Lasting Power of Attorney:

The person appointed is granted the power to handle decisions on your behalf with matters concerning your health and welfare in the event where you lack the capacity to make decisions by yourself.

2. Property & Financial Affairs Lasting Power of Attorney:

The person appointed is granted the power to handle decisions on your behalf regarding matters concerning property and financial affairs if you cannot make those decision by yourself.

You can entrust the lasting power of attorney to the same person for both health and welfare and financial reasons, so you can give this to separate people. The property and financial affairs lasting power of attorney will allow your chosen party to make decisions on your finances in your best interests. This can include making changes to the benefactors of your Will, should the original benefactor decline the funds given to them, or if they die prior to your death, leaving your Will unclaimed.

LPAs are recognised by financial or other institutions such as tax and pension authorities and documents that appoint an LPA are legally binding and may also be established without a solicitor. In the UK, LPAs should be registered with the Office of the Public Guardian and normally can’t be changed unless there are signs of abuse, so choose wisely.

At the time of writing, it costs less than £100 to register a POA in the UK and can take up to 9 weeks to set the full process in motion legally, even if you are an expat living abroad. Low income households may even be entitled to a 50% discount, so it’s worth spending the money for the peace of mind.

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