Personal finance expert Martin Lewis has urged people to consider putting in place a legal document he says is 'more important than a will' - warning that failing to do so could leave families facing serious stress and delays if illness or injury strikes.
Speaking on ITV's This Morning, Lewis highlighted the importance of a Lasting Power of Attorney (LPA), which allows someone you trust to make decisions on your behalf if you lose mental capacity. A Lasting Power of Attorney can cover either health and welfare decisions or financial affairs, and must be formally registered.
The MoneySavingExpert founder said he set one up in his 30s, despite having no expectation that he would need it at that time. He said: “To simplify this, most people worry about their will and having a will and quite right a will is important. But I would argue that a lasting power of attorney is more important than a will. A will dictates what happens to your assets when you die. A power of attorney dictates who can look after your finances and your assets if you're alive but lose capacity.
“And this happens to many more people than they think. And lots of people say, 'Oh, it doesn't matter. We'll deal with it if in the event', you know, whether it's Alzheimer's or a severe stroke or an accident or anything else or dementia that takes away your capacity - the idea that someone else can simply take over your finances and your health and welfare decisions is not true.”
Warning about Court of Protection
He warned that without an LPA in place, families often have to apply to the Court of Protection to gain authority to act, a process he described as costly, slow and stressful, writes Ben Hurst from the Mirror.
“You have to go to the court of protection. It's costly. It's difficult. It's expensive. It's incredibly stressful for the people who are doing it. And it is really difficult. The alternative is that you put a power of attorney in place. That gives somebody else the ability to take over your financial decisions and the health and welfare decisions.”
Lewis stressed that the arrangement only takes effect if capacity is lost, adding that people should not assume relatives can automatically access accounts or make decisions on their behalf. “In the event that you lose capacity it is not that they can take over now. So, I've had one in place since I was in my 30s. I have no foreseeability of losing my capacity that I'm aware of, but I have one in place in the event that someone needs to take over.”
How to set up an LPA
Lewis said the process can be done through a solicitor or independently in England and Wales. “The best way is to get a solicitor, but if you can't, there are halfway schemes or you can do it yourself in England and Wales. It costs £82 to register a power of attorney in England and Wales. It's worth a look.”
There are two types of LPA:
Health and welfare LPA
Use this LPA to give an attorney the power to make decisions about things like:
- Your daily routine, for example, washing, dressing, eating
- Medical care
- Moving into a care home
- Life-sustaining treatment
Property and financial affairs LPA
Use this LPA to give an attorney the power to make decisions about money and property for you, for example:
- Managing a bank or building society account
- Paying bills
- Collecting benefits or a pension
- Selling your home
More information on setting up a Lasting Power of Attorney is available via the UK Government website.
