Q. What exactly is an LPA and why do I need one?
An LPA is a legal document giving the person or persons you trust (your attorneys) the authority to make decisions on your behalf if you become incapable of making them for yourself. The LPA is prepared at a time when you are capable of making your own decisions.
Q. How many types of LPA are there and what are the differences?
There are 2 main types:
a. Health and Welfare. This type of LPA allows you to choose the person or persons to make decisions about your healthcare and personal welfare. You can choose to include making decisions to refuse or to consent to treatment on your behalf, and deciding where you live.
b. Property and Finance. This type of LPA allows you to choose the person or persons you trust to make decisions about how you spend your money, and how your property and day to day financial affairs are managed.
You can prepare either or both LPAs
Q. When do LPA’s become effective?
Your attorney(s) can start using the powers granted by your Finance and Property LPA as soon as it is registered with the Office of the Public Guardian (OPG). Your Health and Welfare LPA can be used once it is registered with the OPG and you have lost capacity to make decisions yourself. However, you can specify the extent of the authority you are granting, or put restrictions, within the document if you wish to do so. For example you may wish to specify your attorney(s) can start managing your financial affairs in the event of your mental incapacity and not before. It is worth noting that it is becoming increasingly difficult for third parties to assist in managing the financial affairs of another. It is now a criminal offence to handle the affairs of someone who is incapable (even if prior authorisation was given) WITHOUT A REGISTERED LPA.
Q. What happens to my LPA when it has been signed?
The LPA has no legal standing until it is registered with the Office of the Public Guardian (OPG). Once the document has been signed, it should be returned to The Will Associates Ltd who will arrange this for you. Registration is an additional service we can provide. Registration can take as long as 15 weeks and the document is then returned to us for storing on your behalf. Once registered, the LPA will continue to be a legal document until the donor dies.
Q. What is a PWPT?
A PWPT is a 2-part process; a Will and a Severance of Tenancy (if needed) on the property to protect each half independently.
Q. Why do I need a PWPT?
When most properties are purchased they are registered at Land Registry in two names (typically, husband and wife). Most purchases are registered as ‘joint tenants’ meaning ‘what is yours is mine’ and vice versa. In reality when one of the partners dies the whole of the property is left to the other, and on second death, the whole of the property is left to the children/grandchildren. This makes the inheritance down the blood line vulnerable if, for example, the remaining spouse or one of the children remarries and decides to include the new family in a new Will. As part of an overall estate plan, a PWPT is a useful tool to ensure your family benefits as you would wish by protecting each half of the property.
Q. Does a PWPT affect my mortgage?
No. Your mortgage will continue as normal.
Q. What happens if I don’t have Will?
A PWPT is a combined Will and Property Trust. You cannot have one without the other. Without a Will the laws of intestacy will apply resulting in possible loss of control over inheritance down the blood line and you are back to where you started.
Q. Understanding terminology
Because a PWPT is a Legal document, it will sometimes use language that is unfamiliar to you. Below are some of the more common misunderstandings: Joint Tenants – see question 1 above Tenants in Common – In order to set up a PWPT you will need to prepare a Severance of Tenancy and submit this to Land Registry. This gives you control over your own half of the property so that when you die, your half is protected in the Trust and ultimately benefits the family in the way you have specified in the Will.