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Appointing someone you trust to manage your affairs should provide peace of mind – but the process to set up a lasting power of attorney (LPA) can be complicated, and is riddled with things that can trip you up.
From submitting shortened names to using too much Tippex, even small errors could drag out the process – which already takes around 20 weeks – or mean your attorney gets rejected by banks when it’s too late for you to make any changes to the LPA.
In fact, new Freedom of Information data from the Office of the Public Guardian (OPG), obtained by Quilter, the wealth manager, reveals that since 2018 nearly 130,000 LPA applications have been rejected due to mistakes.
Here, Telegraph Money sets out why you might want to set up an LPA, and how to avoid the most common errors.
Why set up a lasting power of attorney?
Despite planning for the future being so important, worrying new findings from Schroders Personal Wealth reveal 71pc of older people (aged 60-plus), do not have an LPA.
Katie Nutting, financial planning director at Schroders Personal Wealth, said: “Anyone could find themselves in a position where they are unable to make decisions about their financial affairs.”
There’s no way of knowing when you might lose capacity, perhaps due to a stroke, mental illness, or because of an accident – so it’s not just relevant for the older generation.
Shona Lowe, financial planning expert at Abrdn, said: “Setting up your power of attorney should feel like taking control, not giving it up. It isn’t something you should put off doing.”
There are two types of LPA: one is for property and financial affairs, and the other is for health and wealth.
As for the so-called “donor”, you can choose anyone you want to be your attorney, such as your spouse, partner, relative or friend. You can nominate different attorneys for each type, or the same for both.
It’s a common misconception that partners will automatically be given the right to make decisions. The reality is, that if you don’t arrange an attorney, a court may appoint a deputy to do this.
Now read: Why you need power of attorney, no matter how old you are
Small mistakes will not be overlooked
You’ll need to fill out and submit a set of forms in order to set up an LPA. Any details that are missed on the form could mean you’ll end up waiting for weeks before hearing anything, only to be told that your application has been rejected.
Even small errors can mean your application gets returned.
Daniel Hough, financial planner at wealth manager, Brewin Dolphin, said: “It’s crucial to be as meticulous as possible when filling out the forms to avoid unnecessary delays to proceedings or, worst case, having to go back to square one because your application has been rejected.”
You need to be absolutely sure you have jumped through all the hoops. This is especially important given that even with no mistakes, it’s currently taking up to 20 weeks to register an LPA with the OPG.
Helen Morrissey, from Hargreaves Lansdown, said: “It’s important to get your paperwork checked before submitting it. You need to ensure all information is given and expressed as clearly as possible.”
Having to resubmit forms could add months to your wait.
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