Planning for the future with an LPA, or lasting power of attorney, can be really difficult, but careful preparation will serve you well and save time, stress and difficulty in the long term. When you appoint an attorney, you’re giving someone you trust the ability to help support you, should you lose capacity, and to make decisions on your behalf, should you become unable to do so.
But if things go wrong, devastating consequences could occur. That’s why it’s so important to avoid the following mistake.
A Costly Mistake
You might love and adore your adult child or relative, but are they really the right person to act as your LPA? The person who steps in on your behalf will have the full ability to control your bank accounts, move your money around, change your financial advisor or make decisions about any property you might own.
They might take control and make big decisions. It might not come from a place of malice, but those decisions can cause harm, especially if they’re made quickly or don’t follow the original financial strategy. You can easily create your LPA online, with experts such as https://powerofattorneyonline.co.uk/.
Choosing Your Attorneys
Of course, your attorney should be someone whom you trust, but trust might not be enough. They should ideally be financially competent and demonstrate this in their own life. They should also be happy to seek advice and help, rather than taking control alone.
To avoid mistakes, you could include a clause in your LPA agreement that names your existing financial advisor, for example, as the professional you want your attorney to work with. It wouldn’t assign control to your advisor, but could offer an extra layer of protection.
Other options
You could name a secondary ‘watchdog’, such as a solicitor or accountant, to approve big changes or any alterations to your financial team, not because you don’t trust your loved one, but guidance can be helpful when managing finances in a high-stress situation. The best of us can always benefit from a little expert advice.
Summary
This article warns against a common mistake when choosing who to appoint under a Lasting Power of Attorney. It cautions that an adult child or relative may not be the right choice, since they gain full control over bank accounts, financial decisions and property. It suggests choosing someone financially competent who welcomes advice, and naming a secondary ‘watchdog’ to approve major changes.
Questions this article raises
- How do you check that a proposed attorney is genuinely financially competent?
- Can an LPA be changed later if the wrong attorney was originally chosen?
- What legal recourse exists if an attorney misuses their control?
