As part of our Later Life advice process, we are often asked about the legal recommendations when options for specific mortgage plans, such as Equity Release. Wills and Lasting Powers of Attorney (LPA) are typically recommended, but what is an LPA?

We have asked Tatiana Zenina, a Private Client Solicitor at Grant Saw Solicitors LLP, to explain from a legal perspective, which you can read below.

Unfortunately, there may come a time when you do not have the mental or physical capacity to make decisions for yourself. However, you can appoint someone you trust to make decisions on your behalf should the need arise, for example, to release equity from your home. It is recommended by the Equity Release Council that people entering a drawdown lifetime mortgage plan should have a Lasting Power of Attorney (LPA) in place.

An LPA is a legal document that grants authority to a trusted person, known as the attorney, to make decisions on your behalf should you lose capacity in the future.

There are two types of LPA:

• Property and Financial Affairs – this allows the attorney to handle financial matters, such as managing bank accounts, paying bills, or selling property.
• Health and Welfare – this deals with decisions regarding healthcare, living arrangements, and medical treatments.

LPAs offer peace of mind, ensuring your wishes are respected, and your best interests are upheld. I advise that everyone has LPAs in place as you are still determining what may happen in the future. 

Suppose you are entering into a drawdown lifetime mortgage plan. In that case, having an LPA for Property and Financial Affairs in place gives your named attorney authority to arrange an Equity Release drawdown on your behalf.

If there isn’t an LPA for Property and Financial Affairs in place and a drawdown is required, but you have lost mental capacity, an application must be made to the Court of Protection. This can involve considerable expense and uncertainty, and access to any drawdown facility will be suspended whilst waiting on the Court.

If you are considering entering a drawdown lifetime mortgage plan, I recommend you make LPAs to futureproof your plans.

At the footer of this blog are many FAQs with popular questions posed.

For further information on Lasting Powers of Attorney, visit www.grantsaw.co.uk or email tatiana.zenina@grantsaw.co.uk

For advice on Later Life Mortgages, which include Equity Release/Lifetime mortgages (amongst other lending solutions), then visit Later Life Mortgage | Conran Mortgages (conranfinancial.co.uk) or contact simon.hughes@conranmortgages.co.uk

FAQs

• Is it cost-effective for me to have an LPA / is it cost-effective for me to use a solicitor to prepare an LPA?

It saves money in the long run if you involve the professional services of the solicitor. They will tailor advice around your circumstances, wishes and needs. It will ensure the process is completed fully and properly, and the family and loved ones will not have to go through the complex and much more expensive Court procedures if LPAs are not in place.

• Can my Attorneys make decisions about my Will / what happens after I die?

Your LPA is valid during your lifetime, and on your death, your LPA will cease. If you made a Will during your lifetime, upon your death, the Will becomes effective. An Attorney cannot make a Will for you without a Court Order, so you should ensure you have made a Will whilst you have capacity.

• Can my Attorney steal my assets or cash?

You should appoint Attorneys you trust. When preparing LPAs consider notifying other family members or trusted friends that you are making the application for an LPA. This will ensure they can monitor any suspicious activities and transactions and notify the Office of the Public Guardian if needed.

• Who should I appoint as my Attorneys?

Most people appoint family members and/or a close friend as their Attorney. An LPA ensures that people you trust can make important decisions on your behalf if you become mentally or physically incapable of doing so for yourself. There is also an option to appoint professional impartial Attorneys, such as solicitors or accountants, who will ensure continuity (there will always be someone in the firm who can take the role as the Attorney), impartiality and with relevant expertise.

• How many Attorneys should I appoint?

You can have as many Attorneys as you like, but it is usual to have between one and four. If you have more than one, you can state how you would like them to work together. A solicitor can advise you on the options available and which one would suit your circumstances best whilst considering the pros and cons of each option.

• Can I limit my Attorney’s authority in any way?

It is possible to restrict your Attorneys’ powers should you wish. For example, you can state your intentions for an Attorney to have control over your bank accounts but not a property.

• How does an LPA work in practice?

An LPA is a legal document that allows you to appoint someone you trust to make decisions on your behalf regarding your finances and health when you no longer have capacity to make decisions yourself.  You can choose when you wish for your financial LPA to start, which can be while you have mental capacity. The health LPA needs to be registered with your GP.  When the financial LPA needs to be used, it should be registered by your Attorneys with the banks/financial institutions that you hold assets with.