Create Lasting Power of Attorney to put your future in safe hands

But if you do not plan ahead, things could become very complicated and expensive for you and your loved ones should you become mentally or physically incapacitated.

This issue has been thrust into the spotlight again over the past few days given the controversial plans to screen the middle-aged for dementia, and to pay doctors £55 for every new case they diagnose.

While the aim is to increase the number of people who receive treatment for dementia, there is concern that it could result in some cases being diagnosed incorrectly.

There is also unease about incentivising doctors in this way.

While the debate rumbles on, this should serve as a reminder of the importance of appointing someone to make decisions on your behalf should you no longer be able to think for yourself. It is not only dementia that could lead to you becoming incapacitated.

Someone can lack mental or physical capacity because of an injury or condition such as a car accident or stroke.

Equally, some people may have capacity to make decisions about some things but not others, or their capacity to do so may change from day to day.

To put yourself in safe hands and ensure that your wishes are followed you should compile a Lasting Power of Attorney (LPA).

WHAT IS AN LPA?

An LPA is a legal document that allows you to appoint someone you trust to make decisions about your financial affairs and your health and welfare.

This gives you the peace of mind of knowing that if you ever become incapacitated, the important choices about your life will be taken by someone you trust.

"If an individual becomes unable to make decisions about their own affairs due to old age, illness, or an accident, someone is going to need to do this for them," says James Antoniou from Co-operative Legal Services (CLS). "They will also need to manage that person's estate."

Many people are unaware that in such circumstances, there is no automatic right for a next of kin to have authority over an individual's affairs.

"A number of problems can arise if there is no LPA in place and it becomes necessary to take actions such as drawing money from a bank account, or selling assets such as shares or a house," adds Antoniou.

"By nominating an LPA, trusted individuals, known as attorneys, gain legal authority to look after another's affairs."

If an LPA is not in place, it usually falls to a relative to apply to the Court of Protection to be appointed a "deputy".

Only then can they start dealing with matters on behalf of the person who is incapacitated.

This is potentially a long and expensive process and can be avoided by taking action.

There are two different types of LPA. One deals with a person's property and financial affairs, and the other covers health and welfare issues.

"An LPA is designed to make life easier if you are ever unable to look after your affairs yourself," says Danny Cox from adviser Hargreaves Lansdown. "You select a person, or people, of your choice to help out rather than leaving it to the court to decide."

WHAT DOES IT COST?

An LPA can cost from as little as a few hundred pounds, on top of which you have to pay a court fee of £110 to the Office of the Public Guardian (OPG).

This £110 cost applies no matter whether you have had the LPA prepared by a professional, or arrange it yourself.

The only exception is if you qualify for a reduction or exemption. This might be the case if, for example, you receive certain means-tested benefits, receive Universal Credit, or have a gross annual income of less than £12,000.

With Saga Legal services, the cost of an LPA starts from £207.50, and with Co-operative Legal Services, the cost starts from £315; both prices exclude VAT. However, costs can vary considerably, so it is vital to do your research.

HOW IMPORTANT IS AN LPA?

According to the latest figures, 295,000 applications for LPAs were registered with the OPG in the year from 2013-14, up from 200,000 in the year from 2011-2012.

Overall, there are more than a million LPAs registered. But while this sounds encouraging, most are for older age groups, with figures showing that 94 per cent are for the over-60s with almost half for the over-80s.

Separate research by Saga Legal Services reveals that 66 per cent of people do not have an LPA, and that 28 per cent of Brits do not even know what an LPA is.

This shows there is a real need to increase consumer awareness and to ensure more people take steps to get one drawn up.

"Most people know how important it is to have a will, but only a tiny proportion of us have thought to make an LPA," says Emma Myers, head of wills, probate and lifetime planning for Saga Legal Services.

"Without an LPA in place, your family or loved ones will find it exceedingly difficult to carry out even simple tasks on your behalf."

DRAWING UP AN LPA

The two most common ways of putting an LPA in place involve either instructing a legal professional to prepare the necessary paperwork in accordance with the individual's wishes, or completing the paperwork yourself.

However, if you do decide to go down the "DIY" route, you need to proceed very carefully.

"It is important you fully understand the impact of having an LPA, and that the documentation is completed accurately," warns Antoniou. "Errors can invalidate the document or incur extra court fees."

Given the importance of an LPA, and the legal authority it provides, it may be worth paying a professional to advise you. This will ensure you receive proper guidance, giving you complete peace of mind.

DECIDING WHO TO APPOINT

When drawing up an LPA, you need to think carefully about the people you appoint.

"You might want to choose one person to look after your property and finances, and another to look after your health and welfare," says Dean Mirfin from Key Retirement Solutions. "The key is choosing the people you trust the most."

This is a view shared by Gordon Morris from Age UK Enterprises. "The role of attorney involves a great deal of responsibility," he says. "Think carefully about who you choose. You must be able to trust them to act in your best interests."

WHEN SHOULD YOU DRAW UP AN LPA?

If you are planning on arranging an LPA, you have to do this while you still have full mental capacity.

Equally, while many people think you only need to think about an LPA when you get ill or old, this is a misconception, as the earlier you can arrange this document, the better.

"Physical or mental inability can affect anyone at any time," says Paul Crowley, partner at Paul Crowley & Co Solicitors. "This is why it is so important to plan ahead and ease the burden for loved ones."

Myers adds that once someone has lost capacity, it is too late for them to make an LPA.

"For this reason, anyone over the age of 18 should think about having one," she says. "This way you are protected in case the unthinkable happens. Without one, your loved ones would find it extremely difficult to gain control of your affairs if, say, you had an accident such as a car crash, or perhaps sustained a serious sporting injury.

"Set one up as soon as possible to be on the safe side, no matter what your age or situation."