A Permanent Power of Attorney (LPA) allows loved ones to take care of you and your finances if you become unable to do so.

There are two types of LPA:

The Property and Finance LPA allows loved ones to deal with bill payments, property buying and selling, and managing bank accounts and investments.

The "Health and Welfare" LPA covers decisions about health and care, and even where to live. This can only be used if someone can't handle such issues themselves.

The LPA guarantees that the people you appoint will be able to manage your financial life on your behalf if you are unable to manage your own business. This saves a great deal of money and pain and, as a vulnerable person, ensures that your work is processed accurately and quickly. Accidents, strokes, brain injuries and Parkinson's disease can also affect someone's ability to make their own decisions. Handling your financial affairs can become virtually impossible, which is why charities who care for the elderly recommend everyone plans ahead. This could have the dual benefit of saving a great deal of money and easing the burden on their relatives.

Risks of not having an LPA:

If you lose mental capacity without an LPA in place, your family must apply to the Court of Protection to have a deputy appointed to deal with everyday financial matters. This is a slow and very expensive process, costing thousands of Pounds. If you have to use a lawyer it could cost a lot more. If you already have an LPA in place, this will not be necessary. Joint bank, building society and business accounts can be severely restricted if ONE of the account holders loses mental capacity and there is no registered LPA in place.

Co-ownership restrictions have serious implications, as co-owners cannot withdraw their money freely without orders from the Protection Court. This can be catastrophic, especially if the co-owner pays the only form of income, such as a pension, to this co-account.