There may come a time when, because of physical problems, it would be more convenient for a relative or friend to deal with your financial affairs. Such help would be vital if you were to lose your mental faculties.  

It is possible to execute a power of attorney, giving a person or persons legal authority to deal with your affairs. But, in order to grant such a Power, you must retain sufficient mental capacity. You cannot afford to leave it too late.    

An ordinary power of attorney is quick and cheap to put in place but can be used only while you have mental capacity. If you want your attorneys to act for you even after your mind has failed, then you must execute a special document, called a Lasting Power of Attorney (“LPA”).  

Some people, between 1986 and 2007, were farsighted enough to execute Enduring Powers of Attorney. However, while existing Enduring Powers remain in force on broadly the old terms, no new Enduring Powers can be created. You must create an LPA, which is more complex, but also more comprehensive.    

You can appoint only one attorney, or more than one. If you appoint two or more attorneys, you can prescribe that they should always act together, or that each may act independently, or that they may carry out some tasks independently, but not others. You can impose restrictions and limitations, and give general guidance. And you can specify an attorney to take over if your appointed attorney dies before you. At least one suitable person must sign a certificate, incorporated in the LPA, that you understand the document and have not been pressured into making it.         

You could also execute a separate LPA, to give your attorneys authority to make decisions about your personal welfare. This kind of power did not exist until the recent Mental Capacity Act came into force.   

Before a LPA can be used, it must be registered with the Office of the Public Guardian. In the LPA, it is usual to specify at least one person to whom notice of proposed registration will be given.  

There are people who have not executed LPAs and who suffer a loss of mental faculties. Their financial affairs are frozen until a concerned friend, relative or professional has secured appointment as their “deputy” under the Court of Protection. It is much more complicated and expensive to secure appointment as a deputy, than to appoint an attorney while you are able to do so; and the Court’s continuing supervision results in yearly fees.     

Failure to appoint an attorney in good time can sometimes prove very expensive.