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Power of Attorney: Guide to Managing Loved Ones’ Finances

On August 19, 2018

Power of Attorney: Guide to Managing Loved Ones’ Finances

It can be a difficult issue to consider, and even asking the question of how to get power of attorney may seem daunting, but the time may come when you need to take over the finances of a loved one. Where mental incapacity exists, legal power of attorney enables you to take control of your loved one’s finances. It is helpful to know the different types, and how to get, power of attorney.

There are three kinds to consider: Ordinary Power of Attorney (OPA), Lasting Power of Attorney (LPA), and Health and Welfare Lasting Power of Attorney. The first of these, Ordinary Power of Attorney, is used when a person wants someone to take over their financial affairs for a certain amount of time only. This tends to be the appropriate choice for when the person has suffered an illness, an accident resulting in physical injury, or is abroad for a long period of time (needing, say, someone to deal with the bank for them). An OPA is a relatively short-term option.

However, often a person needing power of attorney requires it long-term, and this is where Lasting Power of Attorney is appropriate. An LPA is where a person chooses another to look after their financial affairs if they lose mental capacity. This can be a truly helpful thing to have in place if your loved one later begins to suffer from Alzheimer’s, for example. There is also the separate Health and Welfare LPA, where a previously nominated person can make decisions in medical and associated affairs for a mentally incapacitated individual. It is worth noting that an LPA and a Health and Welfare LPA are legally separate, independent of each other.

How, then, do you get an LPA? The key point is that the person must set it up whilst they still have mental capacity. After an application has been submitted, it takes up to ten weeks to register. Once this has occurred, the nominated attorney can start making decisions (unless it has been specified otherwise on the application). However, if a person already has limited mental capacity, then an LPA can no longer be set up for them. Instead, their loved one needs to register as a deputy, a process which is more difficult and can cost thousands (whereas an LPA costs £82 to register in England and Wales).

As a result of this, whilst power of attorney is not an easy matter to consider, the benefits for your loved one, and yourself, are significant if an LPA is set up in advance of medical problems or loss of capacity. This may ultimately enable better care for them.

Need help managing your loved one’s finances? Trust Peter Robinson Co., specialist team to prepare your LPA, whilst you still have the choice who to appoint as your Attorneys.

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