In its simplest form, a Lasting Power of Attorney (LPA) gives a trusted friend, family member, close aide or solicitor the authority to act on your behalf. It is a legal document that authorises an attorney to manage your affairs when you’re mentally unfit to do so on account of illness or any other unforeseen circumstance. They are not just for the old or ageing but can also be made by young adults above the age of 18.
LPAs are flexible because they can be made to take care of your health as well as your finances. You could appoint one person to handle both LPAs or appoint separate attorneys. The bottom line of any LPA remains that you trust this person or these attorneys without reservations to act in your best interest.
In this article, we’ll explore the scope of an LPA.
1. Knowing LPA Basics
Trusting a person so fully that you entrust your physical & financial well-being into their hands when you’re mentally unfit to do so, is a nervous process. Understandably so.
The whole point of an LPA is that you have someone to take care of you and make important decisions in the event of your mental incapacitation.
LPAs come into effect from the time your mental incapacity is determined, usually certified by a health or social services professional. Unlike wills that come into effect only after your passing away, LPAs come into effect when you are still alive.
However, your attorney can receive legal authorisation to act on your behalf only after your LPA is registered with the Office of the Public Guardian (OPG). Before you apply to register an LPA, you also need to send an LP3 form notifying people.
An error-free LPA application can take anywhere between 8 and 10 weeks. However, with the help of digitalisation, you can make a lasting power of attorney online & reduce your application time by half.
2. Health & Physical Well-being LPA
LPAs primarily deal with health-related issues, and your physical well-being is the top priority.
It’s important to understand that LPAs are not simply about granting another person authority to act on your behalf. Your attorney will be permitted to make life-and-death decisions when you are mentally incapacitated if things come to that.
This may include decisions about the refusal of certain lines of treatment that involve experimental drugs or procedures, dependency on life-support equipment, organ donation and end-of-life care.
The scope of a Health LPA also includes your living arrangements, hospice care, decisions about elderly care, appointing nurses or staff for daily care at home, setting aside funds for healthcare expenses, etc.
In these cases, it’s crucial to remember that in the absence of a health LPA, medical professionals are bound by law to give you the best treatment. This can sometimes conflict with your personal, religious or spiritual beliefs or practices.
An LPA can prevent such a conflict. You can simply have a discussion with your attorney & medical support staff regarding potential health situations, and procedures and what can or should be done to respect your honour & dignity.
These instructions can then be mentioned in your LPA, along with any restrictions on what cannot be permitted in your health plans in the event of your mental incapacitation.
For example, if your personal beliefs conflict with the medical practice of offering patients ventilator support as part of end-of-life care, you could explicitly state that in your LPA. This will help your attorney liaise with your medical support team to honour your beliefs & wishes.
It is important to remember that your health LPA will come into effect only after your mental incapacitation is determined by a solicitor, caregiver, health worker or medical professional.
3. Property & Finance LPA
Financial well-being, though secondary to your physical well-being, is still an important aspect to consider. This is especially essential if your loved ones depend on you for financial support. An LPA can reduce their stress in an already difficult time.
With the increased use of technology and the introduction of a new class of assets known as ’digital assets’, the scope of LPAs has broadened significantly.
Today, Property & Finance LPA includes the management of your investments, digital finance portfolio, distribution and sale of property, or any maintenance & repairs. You can also grant your attorney authority to buy or rent properties on your behalf as you deem fit.
It is important to make provisions for your beneficiaries in your Property & Finance LPA on the distribution of profits arising from property sales, rent or interest from bank deposits. It would be wise to notify your beneficiaries of their inclusion in your LPA.
LPAs could also make arrangements for tax management—filing of claims, submitting tax returns, etc as well as pensions or other welfare benefits.
You could also enlist all the ways your attorney is authorised to manage your wealth, especially if you have certain preferences regarding future investments.
For example, if you prefer accruing profits from property sales to be invested in a digital currency like crypto or want your crypto assets to be sold to be invested in property, you could state that in your LPA.
Property & Finance LPAs can come into effect as soon as they’re registered. Unless you explicitly state otherwise, your attorney can assume their responsibilities regarding your financial management.
Conclusion
Both LPAs are designed to authorise your attorney to act in your best interest, which is aligned with your beliefs & wishes. LPAs are a protective legal document that ensures your well-being after you lose mental capacity.
They’re also empowering, as you get to choose the terms & conditions you want to live by, even if you are no longer aware. The broad scope & flexibility of LPAs make it a wise option to consider.
