According to the Alzheimer’s Society there are around 850,000 people with dementia in the UK, of whom 42,000 are under 65. This number is forecast to be 1.6 million people by 2040.

It is estimated that around a third of people born in the UK in 2021 will suffer from this debilitating mental illness at some stage in their lives.

Few of us want to think that we might lose our mental capacity or how we would cope with our financial affairs and personal welfare if we did.  

Dementia is not the only reason one might lose their capacity.  The global health crisis of the last twelve months caused by Covid-19 have brought this into even sharper focus.

Fortunately, there are measures we can take to provide security and ease the potential burden on our relatives, and one of the key actions is to create a Lasting Power of Attorney.  At bdb we recommend that all of our clients have a Will and Lasting Power of Attorney regardless of age.


What is an LPA?

A Lasting Power of Attorney (LPA) was created under the Mental Capacity Act 2005 and came into effect in 2007.  It is a way of giving someone you trust (an attorney) the legal authority to make decisions on your behalf if you lack mental capacity at some time in the future.

There are two types of LPA:

  1. Property and Financial Affairs
  2. Personal Welfare


Property and Financial Affairs

With this LPA, an attorney can make general decisions about finances and property, such as:

  • Buying and selling property
  • Paying Bills
  • Investing money
  • Managing bank accounts

To avoid confusion and provide protection, your attorney must keep accounts and make sure their money is kept separate from yours.


Personal Welfare

This covers decisions about healthcare and personal welfare and can only be used once a person has lost mental capacity. An attorney can generally make decisions about:

  • Where you should live/ moving into a care home
  • Your medical care
  • Your daily routine, e.g. washing, dressing and eating
  • Life-sustaining treatment

With both LPA’s you can restrict or specify the types of decisions your attorney can make or you can simply allow them to make all decisions on your behalf.

We feel that the control and reassurance provided by an LPA is a compelling reason that everyone should have one. 

In addition to the emotional reassurance an LPA gives that your wishes will be carried out, there are important practical advantages too.  For example, the operation of personally held bank or investment accounts can be made very difficult where your permission cannot be given (even for your spouse). In this instance the alternative is an application to the Court of Protection which can often prove to be a slow and difficult process.


How to set up an LPA

Most of our clients employ a solicitor or STEP qualified professional to help them create their Lasting Power of Attorney, however it is also possible to complete your own given the time and inclination. A useful guide can be found here.

Helping our clients put in place the right legal structures is a really good example of how our role as Personal Finance Directors extends to much more than simply making sure the money is in the right place.

We would love to share our experiences of how LPA’s can make a huge difference. If you would like to discuss why you should have one, or find out more about what we do, we would love to hear from you.

Posted by: Matthew Kiddle | Posted in: News