Wills and lasting power of attorney (LPA)
Lifetime affairs can be looked after by use of a LPA, whereas your affairs after death can only be managed by executors of your will. Often people think executors’ powers extend to lifetime affairs but they do not. It is just as important to have someone trustworthy and reliable to look after your affairs during your lifetime as it could affect your way of living if you didn’t have someone immediately available to help.
A LPA enables you to choose a person or persons to look after your financial and/or health affairs, as well as to act in your best interests to protect assets and health decisions when you cannot make those decisions yourself. Often making such decisions is more relevant during your lifetime as it can affect your standard of living. As well as having your will in place to appoint executors, don’t forget to get your lifetime affairs in order too by creating lasting powers of attorney.
Joint bank accounts and LPA
Having joint accounts or even an appointeeship with the Department for Work and Pensions are no replacement to LPAs. Having a joint signatory or third party nomination on an account may seem like a ‘quick fix’ but overall it isn’t always a solution to a wider problem.
Anyone can add a joint signatory or change an account to be in their joint names but the authorisation only lasts for as long as you have capacity. If you were to lose capacity, the bank can remove the joint access as it cannot last during a period of incapacity. Although rare, it is possible for them even to freeze the accounts.
Not having an LPA would also limit communication with other institutions or any health decisions to be made for you. A complexity can also occur following the unfortunate circumstance of death, as this would see the joint account pass outside of your estate to the surviving owner, which may not have been what you wanted, and beneficiaries can also lose out.
When to get an LPA
If you are in a position where you need an LPA to be operational there is a good chance that you may find it harder to do, so where possible, try to have this in place before it is needed. The person certifying you have capacity to understand the document (known as a Certificate Provider) may find it harder to confirm you have the necessary standards of understanding and a doctor may need to be involved, which will incur a further cost.
The very best time to register an LPA is when you are in no rush or have no immediate need for its use. Just creating an LPA does not mean you lose control or hand over responsibility of your affairs right away. If anything you are keeping control as you are choosing the person you know and trust rather than that decision being taken away from you.