Many of us actively plan ahead for the future by saving up, investing, and buying insurance. We do this because we want to be sure that we are prepared for a rainy day. We also want to be sure that we don’t inconvenience our family members too much when they care for us in the future.
But how many of us actually plan for the possibility that we may lose our mental capacity?
Losing mental capacity is a real challenge to our physical and emotional well-being, and creates stress for our family members. It is therefore something worth planning ahead for.
What is an LPA?
An LPA is a legal document that lets you (the donor) appoint one or more people you trust to be your donees. They will act and make decisions on your behalf should you lose mental capacity one day.
You must be 21 or over and have mental capacity to make your LPA.
Your donees can be appointed to act in two broad areas: personal welfare, and property and affairs.
What if you don't have an LPA?
If you don't have an LPA and you lose mental capacity, your family member is not automatically given the right to make legal decisions on your behalf. This can hinder their ability to care for you.
As they have not been legally appointed to do so beforehand, they may face difficulties trying to:
- Make care arrangements
- Manage your bank accounts and properties
- Decide how best to use your funds for your day-to-day needs
Your family member will have to apply to Court to be appointed as your deputy, before they are authorised to make decisions and act on your behalf.
Compared to making an LPA, the deputyship application process will not only take longer to complete, but will also cost more.
Which LPA form should you use?
There are two LPA forms, with LPA Form 1 being the most widely used:
- Form 1 : A standard version that allows donors to grant general powers with basic restrictions to donees.
- Form 2 : For donors who wish to grant customised and specific powers to their donees.
How to make an LPA?
The inforgraphic provides a useful guide on the process to make an LPA.
Take note : Application fees are waived until 31 March 2023.
In conclusion, consult your estate planner on the issues that may arise to prevent any uninvited consequences of losing your mental capacity or becoming "P".