Lasting Powers of Attorney
WHAT IS POWER OF ATTORNEY?
Power of Attorney is giving someone the ability to act on your behalf to make decisions that impact your life. This usually relates to financial or medical decisions when the donor (the person giving Power of Attorney) does not have the mental capacity to make these decisions themselves.
WHEN WOULD YOU NEED A POWER OF ATTORNEY?
You must have adequate mental capacity when you decide who you will give Power of Attorney to, which is why it is a good idea to speak to our solicitors about our Power of Attorney services before you need it.
If a loved one has already lost mental capacity without giving someone Power of Attorney, you will need to apply through the Court of Protection for a Deputyship Order. This can be a more costly, complicated process, especially if someone else objects to you being made responsible for your loved one’s decisions.
If you set your Power of Attorney early, it offers peace of mind should you suffer an accident or sudden illness that reduces your mental capacity. It’s not pleasant to think about this happening to you or a loved one, but planning ahead helps to minimise the impact this major change can have.
WHO CAN BE YOUR POWER OF ATTORNEY?
By the letter of the law, you can give a Power of Attorney to anyone if they are 18 or over and they have the mental capacity to make their own decisions.
Typically, your attorney should be someone you trust completely. Common choices include:
Your husband or wife
Another family member
A close friend
It is possible to give more than one person Power of Attorney over your decisions, but you must specify if they make all decisions jointly, or they can make decisions separately.
When choosing who you give Power of Attorney to, consider the following:
How well do they manage their own finances and obligations?
How well do you know them?
Do you trust them to act in your best interests?
Will they be happy to take on this responsibility?
WHAT ARE THE TYPES OF POWER OF ATTORNEY?
There are two types of Lasting Power of Attorney:
Property & Financial Affairs LPA
This gives your appointed Power of Attorney the authority to make decisions relating to your money, property and other possessions. This includes managing your bank accounts, paying bills, collecting pensions and selling a home or property.
Health & Welfare LPA
This gives your appointed Power of Attorney the authority over your daily routine and medical care, as well as moving into a care home and life-sustaining treatments, where the donor doesn’t have the capacity to make their own specific decisions.
It is recommended to make both at the same time to ensure you have all areas covered should you lose mental capacity unexpectedly.
HOW LONG DOES IT TAKE TO GET POWER OF ATTORNEY?
After filling out and sending the relevant forms to the Office of Public Guardian, it typically takes approximately 20 weeks to register someone as your attorney. That is why it is advisable to arrange your Power of Attorney long before you lose mental capacity, as until your attorney is registered, they can’t make any decisions on your behalf.
RISKS OF NOT HAVING A LASTING POWER OF ATTORNEY IN PLACE?
If you lose mental capacity without an LPA in place, your family must apply to the Court of Protection to have a deputy appointed to deal with everyday financial matters. This is a slow and very expensive process, costing thousands of Pounds. If you have to use a Solicitor it could cost a lot more. If you already have an LPA in place, this will not be necessary.
An LPA ensures that, should you be unable to manage your own affairs, the people you have appointed can manage your financial life on your behalf. This can save a great deal of money and distress, and will ensure that, as a vulnerable person, your affairs will be handled correctly and quickly.
According to the Alzheimer’s Society, “There are an estimated 57.4 million people living with dementia around the globe. It is estimated that this number will rise to 152.8 million by 2050”
Accidents, strokes, brain injuries and Parkinson’s disease can also affect someone’s ability to make their own decisions. Handling your financial affairs can become virtually impossible, which is why charities who care for the elderly recommend everyone plans ahead. This could have the dual benefit of saving a great deal of money and easing the burden on their relatives.
Joint bank, building society and business accounts can be severely restricted if ONE of the account holders loses mental capacity and there is no registered LPA in place.
“If one joint account holder loses mental capacity, banks and building societies can decide whether or not to temporarily restrict the use of the account to essential transactions only” – British Bank Association
The restricting of a joint account has severe implications as the joint owner cannot freely withdraw what is their own money without an order from the Court of Protection. This could be devastating, especially if the joint owner has their only form of income, such as their pension, paid into this joint account.
“If your joint bank account is frozen, how will your partner pay essential bills such as your mortgage, utilities, car payments or insurance?”
What is a Property & Financial Affairs Lasting Powers of Attorney?
A Lasting Power of Attorney (LPA) for finance and property is a powerful legal document that allows someone you trust to take charge of your financial matters and property decisions.
This specifically tailored LPA focuses on managing your assets, property, and financial affairs. It grants your chosen attorney(s) the authority to handle tasks such as managing bank accounts, paying bills, handling benefits, buying or selling property, and making investment decisions on your behalf.
What sets this LPA apart is its lasting nature. It remains valid even if you lose mental capacity in the future, meaning you can have peace of mind knowing that your affairs are in capable hands.
By creating a Lasting Power of Attorney for property and financial affairs, you can ensure that your home and financial matters are managed effectively, even if you can no longer do so yourself.
Why You Should Have a Lasting Power of Attorney for Property and Financial Affairs
Having a person designated as your lasting power of attorney for property allows them to manage your financial assets and make decisions on your behalf when you are unable to do so.
Without clear instructions in place, by law, your income and bank account cannot be accessed by anyone else. This means your attorneys cannot sell your house or other assets, manage your bills, or pay for your care.
If you have set up a health and welfare-lasting power of attorney, it is essential to ensure that the designated person can easily access funds for your care.
For these reasons, it is advisable to appoint an attorney for health and welfare as well as a lasting power of attorney for property and financial affairs.
Setting up a lasting power of attorney for property and financial affairs is not limited to the elderly or infirm. It is a prudent step for everyone to ensure their loved ones can manage their finances in the event of unexpected loss of mental capacity.
What can Financial Attorneys do?
A Financial Attorney has the power to handle your financial assets for you. Their range of duties include:
– Managing various bank accounts, including current accounts, building society accounts, and savings
– Paying bills, including the setup and termination of Direct Debits
– Collecting and overseeing payments like benefits, pensions, and any other sources of income while acting in your name
– Facilitating property and asset transactions, such as selling or buying
– Executing gift transactions on your behalf.
What could happen if I don’t set up a Property and Financial Affairs Lasting Power of Attorney?
There can be severe and upsetting consequences for the families of individuals who don’t set up a Property and Financial Affairs Lasting Power of Attorney.
Your family and loved ones won’t be able to access your money to pay for important things for you, such as your care provider or food.
Therefore, you and your relatives lose complete control of your finances. You should also consider your spouse or partner when thinking of setting up a Property and Financial Affairs Lasting Power of Attorney.
Many people assume that if they lose mental capacity, spouses and long-term partners have an automatic right to access their money and act on their behalf – but this is not the case, so it is important to consider how a finance power of attorney or property power of attorney could support your future.
What happens to my joint bank account if I lose capacity?
Once the bank learns that one of the account holders has lost capacity, they will usually freeze the account, irrespective of it being held in joint names.
WHAT IS A HEALTH & WELFARE LASTING POWER OF ATTORNEY?
A Health & Welfare Lasting Power of Attorney (LPA) is a legal document that enables a person (known as the Donor) to appoint another person (known as the Attorney) to make decisions on their behalf in relation to health and welfare matters. The LPA takes effect once it has been registered with the Office of the Public Guardian (OPG), and if the Donor were to become mentally incapable in the future.
A Health & Welfare LPA allows the Attorney to make decisions on medical treatment and the provision of care, but also includes wider decisions such as who the Donor has contact with and where they live. The Attorney can make decisions on life-sustaining medical treatment if the Donor has provided for this in the LPA.
DID YOU KNOW?
There is no automatic legal right for your family or friends to make medical or care decisions on your behalf, even if they are your spouse or child. However, by signing a Health & Welfare LPA, you can appoint someone of your choosing to make medical and care decisions for you, and so taking that power away from doctors and social workers.
WHAT COULD HAPPEN IF I DON’T SET UP A LASTING POWER OF ATTORNEY?
A Health and Welfare Lasting Power of Attorney is designed to give you some control when you are unable to make decisions yourself.
Therefore failing to have a Health and Welfare Lasting Power of Attorney in place can have significant consequences for you and your family.
The absence of a Health and Welfare Lasting Power of Attorney means that your family members and loved ones will be unable to make decisions how you live or are cared for. Small examples of this include the clothes you wear, the food you eat, and the clubs you attend.
More significant examples of what a power of attorney LPA may include making decisions about the type of medicine treatment you undertake, the type of care you access and personal questions like where you live.
Social care provision is one of the main reasons people set up a Health and Welfare Lasting Power of Attorney. They trust their family members or friends to make decisions about the best home or provider for them – and don’t want that decision to be made by strangers or social services staff.
HOW DO I MAKE AN LPA?
Just like the property and financial affairs LPA, you need to make an attorney of power while you still have mental capacity. You must register the LPA with the office of the Public Guardian (OPG). You can register the arrangement yourself or get an attorney to do it on your behalf.
Please call if you have any questions, and if you would like to book an appointment