The LPA is a legal document that allows a person who is over 21 years of age (‘donor’) to appoint one or more persons (‘donee(s)’) to make decisions and act on his behalf should he lose mental capacity one day.
There are 2 main types of LPA appointment and they are frequently used. A donee can be appointed to act in the two broad areas of personal welfare and property matters.
Why Get a Lasting Power of Attorney?
If you lost mental capacity and did not make an LPA, your family members must apply for a court order to administer your affairs. This court order is one where the court appoints a person to be the court-appointed deputy to manage your affairs.
If you had made a PA, your family members do not need to get the court order. This means that they save money (several thousand dollars) and time (several months) because you already had an LPA which they can rely on. There are many instances of families who cannot access the bank accounts of the breadwinner, who has lost mental capacity and cannot pay their bills as it takes months for a court order to be issued.
What is the difference between an LPA and a will?
Having a will ensures that your executor distributes your assets in the manner you have directed in the will after you have died.
But if you lost mental capacity and are still alive, the will does not come into effect.
In such a situation, a Lasting Power of Attorney (LPA) allows the person you have authorised to manage your affairs and make decisions for you.