We don’t like to entertain the possibility, but sometimes we lose the capacity to act for ourselves or even to make decisions for ourselves.
There is a legal standing for most everything, and this is where a Lasting Power of Attorney (LPA) applies. The LPA is a legal document whereby a person of legal age and sound mental capacity (also known as a donor) can voluntarily and proactively appoint one or more persons (also referred to as donee[s]), to make decisions on his or her behalf upon loss of mental capacity. These decisions are usually of personal welfare matters, actions regarding property and estates, and so forth.
As opposed to General Power of Attorney – which usually ceases effect when a donor loses mental capacity – the LPA takes effect upon loss of that capacity. Therefore, the LPA is a mechanism that allows a person to plan for such a contingency as loss of mental capacity, with trusted person(s) to act in their stead.
Generally speaking, it could be said that anyone and everyone needs an LPA: No one can be sure what’s to come. However, we can apply some reason against the expense of engaging an attorney and incurring the fee associated with production of an LPA.
If you have sizable assets and are concerned about their proper management or disposition in the absence of your steerage and oversight, then an LPA may be for you. It is wise to identify a trusted associate or associates in advance – people that will make good faith decisions for you when you cannot do so for yourself. With this foresight, you eliminate any worry or stress that may accompany uncertainty; you also alleviate any difficulties your loved ones and close associates may feel in the absence of an LPA and a catastrophic loss of mental capacity.
When you consider the full range of decisions and actions that may be necessary upon your loss, you may wish to consider an LPA. Your donee can be authorized to make personal welfare decision, such as those involving health care. They can authorize activity regarding property, including financial matters. Depending on the level of authority you put into the LPA, they may make decisions on where you live, who you should live with, day-to-day care decisions regarding clothes, diet, sleep, etc. They may decide upon appropriate social activities, may handle your correspondence and even manage who you have personal contact with.
The importance of this decision, in terms of invoking an LPA and the choosing of specific donee(s), is further realised when you consider that you may authorise the approval of buying, selling, renting and even mortgaging property. A donee may open and close bank accounts and manage dividends, income, tax matters, etc. You may wish donees to have authority to purchase vehicles when necessary, in their estimation. The list can go on and on.
What is important is to judge your specific liability in the event that you lose the capacity to perform actions and judgments for yourself. If you gauge your assets, your desires in the absence of your capacity, and the associated complexities involving that scenario, you’re a long way toward deciding on whether a Lasting Power of Attorney is for you.