According to Alzheimer’s Research UK, by 2030 more than 1.1 million people in the UK will be diagnosed with dementia.
Lasting Powers of Attorney
Accidents can happen at any time. An accident may result in you losing your physical and/or mental capacity or being unable to deal with your affairs. With a lasting power of attorney (LPA) your trusted people (your attorneys) will be able to make important decisions on your behalf.
If you do not have an LPA then those closest to you must apply to the Court of Protection to appoint someone to manage your affairs (a ‘Deputy’), which will be more costly and can take several months. All of your financial affairs (such as bank accounts) are ‘frozen’ until the Court appoints your Deputy.
It is much less expensive to make an LPA than for someone to apply to the Court of Protection to be appointed as your Deputy if you do not have an LPA. Deputies also have to pay annual costs and an insurance premium, while attorneys do not have this expense.
There are two types of LPA:
1. Property and Financial Affairs
Your attorneys can deal with your financial affairs, such as buying/selling your home, managing your investments, operating your bank accounts and paying your bills.
2. Health and Welfare
Your attorneys can look after your healthcare needs, such as where you live, medical treatment and your day-to-day care.
An LPA is designed to be recognised and accepted by all financial institutions and medical practitioners within England and Wales, provided it is registered with the Office of the Public Guardian. An organisation receiving an LPA from your attorneys should accept it as your attorneys’ authority to act in relation to your affairs.
Attorneys cannot do whatever they want with your affairs. They are under a duty to act in accordance with legislation. If there are concerns regarding the conduct of an attorney, this should be reported to the Office of the Public Guardian which will investigate and, if appropriate, can remove an attorney.
Whilst attorneys have the same powers as you when dealing with your affairs, they have to act in your best interests and there are restrictions on the decisions that they can make, to protect you from financial harm.
LPAs can also be made as part of succession planning for your business interests. You can make a property and financial affairs LPA in relation to your personal assets and a separate LPA in relation to your business assets. This will enable your business to continue with minimum disruption.
Legal advice should always be taken when considering the appropriateness of an LPA for business interests and the best person(s) to appoint.
Before LPAs the way to appoint attorneys was via an enduring power of attorney (EPA). Although legally valid documents, EPAs now can be difficult to use. Financial institutions’ systems are generally set up for processing LPAs and many staff have only been trained in connection with LPAs.
Points to consider:
Make an LPA whilst you can.
Carefully consider who you would like to appoint as your attorneys, and talk to them so that they understand your wishes and their responsibilities.
Decide how your attorneys should utilise your assets to meet the cost of your needs, and to what extent they should consider your wishes in your will.
Decide whether you wish to make one or both types of LPA.
Consider whether to make a record of any special wishes regarding medical treatment or ‘end of life’ wishes if making an LPA health and welfare.
Include special wishes or aspects of your attorneys’ responsibilities about which you have strong opinions.
