A legal safeguard that enables trusted individuals to manage a person’s financial affairs if they lose capacity is still ‘woefully’ underused in the UK, warns estate planning specialist.
Michelle Seddon, a partner in our firm’s private client team, says many people still assume Lasting Powers of Attorney (LPA) are only relevant in later life, despite the reality that incapacity can happen at any age through illness or accident.
“There is a real ‘it won’t happen to me yet’ mindset when it comes to LPAs. But incapacity can strike at any age, and without the right safeguards in place, families can find themselves completely locked out of decisions at the worst possible moment.”
“LPAs are one of the most important safeguards people can put in place, yet too many still delay making them because they assume they will not need one for many years.”
A Power of Attorney allows someone to appoint trusted individuals to make decisions about their finances, property, health or welfare if they lose mental capacity, but despite increasing awareness, uptake remains low at around 20% of adults in the UK.
“Without an LPA, even your closest family members have no automatic legal right to make decisions for you, and banks, care providers and medical teams cannot simply take their word for it,” added Michelle, who specialises in succession planning and tax advice.
“In these cases, families are often required to go through the Court of Protection to obtain a deputyship order, which can be a lengthy and complex process.”
“This involves a formal court application, medical evidence and financial disclosure before a deputy is appointed, and can take months to complete, incur ongoing costs, and leave bank accounts and decision-making on hold in the meantime.”
“An LPA provides clarity, authority and reassurance, removing guesswork at a time of uncertainty while giving you control over who acts and how they act, in line with your wishes, values and personal preferences so decisions reflect what matters most to you, in what remains a ‘woefully’ underused safeguard in the UK.”
More than 1.3 million Lasting Power of Attorney applications were received in 2023/24 (around 1.16 million registered in 2023 alone), reflecting record demand and year-on-year growth, yet despite this surge, around 78% of UK adults still do not have an LPA in place.
Michelle and her team at Clarke Willmott encourage individuals to consider whether they have the right arrangements in place to ensure their affairs are protected if the unexpected happens.
If you would like further information on any of the above tips then please get in touch with our private wealth services team by requesting a consultation.
