The Equity Release Council previously hosted a series of webinars where consultant solicitor Malcolm Emery shared his expertise on Lasting Powers of Attorney (LPAs) and other legal issues. In case you’ve missed it, you can watch the whole webinar again if you are a member of the Council.
What is an LPA?
An LPA is simply a legal document which lets an individual (also called a ‘donor’) appoint one or more people (called ‘attorneys’) who can make a decision on their behalf in case they lost their mental capacity due to an illness or accident. There are two types of LPAs: health and welfare and the second one is covering property and financial affairs.
Why does it matter?
An LPA is a form of insurance mechanism or contingency plan in case you lose your mental capacity. In the worst case scenario if you suffered a severe accident and you were not able to make financial decisions, you run the risk of your bank accounts and other assets being frozen. An LPA can secure your financial future in case you suffer a very serious accident; only 1% of people in the UK currently have an LPA. It is important to be noted that LPA is a completely separate legal document to a will and it should not be confused.
What does the process involve?
The process of appointing an attorney/s is a straightforward one. First, you will need to choose your attorney and then fill out a form in order to appoint them as your attorney here. The last step of the process is the one which can take the longest and that is the registration of your LPA with the Office of the Public Guardian, which can take up to twenty weeks. To register an LPA, you will need to pay £82. You can always cancel your LPA or appoint a new one on this link. A financial LPA gives the attorney the power to make the following decisions: paying your bills, managing your bank account, selling your home and collecting any benefits due.
An LPA complements equity release by giving extra peace of mind. It is important to mention that you can take out an equity release plan with a power of attorney. Furthermore, if you have elderly parents and you have a power of attorney, they can still release equity from their home which can help them manage their expenses.
