Financial advisers across the UK are warning that a crucial legal document, the lasting power of attorney (LPA), is being massively underused, despite being just as vital as a will. The £92 document allows individuals to appoint someone to make decisions on their behalf if they lose mental capacity.
Why LPAs Matter
An LPA enables a donor to choose attorneys to handle their health, welfare, property or financial affairs. Without one, families must apply to the Court of Protection, a process that can be lengthy, expensive and emotionally draining. Experts stress that loss of capacity can happen at any age due to illness or accident.
Types of LPA
There are two types: one for health and welfare, and another for property and financial affairs. Individuals can set up one or both. The registration fee is £92 per LPA in England and Wales, with reductions available in some cases.
Expert Warnings
Joe Farmer of The Retirement Studio said: "LPAs should be viewed as just as important as writing a will, but a huge percentage of families only realise how important they are when it's already too late." He noted that spouses or next of kin cannot automatically manage finances without an LPA.
Graham Nicoll of NCL Wealth Partners shared a case where a husband's accounts became inaccessible after he lost capacity, causing financial and emotional stress. Steven Greenall of Greenall Estate Planning added: "Everyone knows they need LPAs, but nowhere near enough people have them in place."
Common Misconceptions
Nouran Moustafa of Roxton Wealth explained: "Many people assume being married or next of kin gives legal authority – sadly it does not." Paul Denley of Oakham Wealth Management noted that LPAs are often delayed until a crisis, leading to frozen bank accounts and stalled decisions.
Jess Best of McLaren Capital emphasised the peace of mind an LPA provides, while Eamonn Prendergast of Palantir Financial Planning concluded: "LPAs are still hugely underused, and the consequences of not having one can be severe."
