There is never a ‘right’ or a ‘good’ time to set up Powers of Attorney and having the conversation about who will manage your affairs can be difficult to broach.
Whilst losing capacity is most commonly associated with degenerative diseases in later life, it can actually happen at any age in the form of a life-changing event or contracting a disease, that could happen at any age. Therefore, having a Lasting Power of Attorney in place means you are prepared for any such unexpected event.
Rebecca O’Donnell explains more about the factors involved in making an LPA…
According to the Office of the Public Guardian, less than 1% of the adult UK population has an LPA. Considering the statistics around dementia, which sadly speak for themselves; with one in six over the age of 80 suffering from the disease, along with the fact that the population is ageing; the percentage of those with an LPA in place seems disproportionately low.
The only restrictions on having an LPA drafted In England and Wales is that you must be at least 18 years old and have mental capacity (i.e. the ability to make your own decisions) at the time the LPA is signed.
There are two types of LPA:
- Health and welfare: This enables attorneys to make decisions regarding your daily routine, medical care, decisions on care in later life and receiving life-sustaining treatments.
- Property and finances: This enables attorneys to make decisions regarding matters such as running bank account(s), paying bills, decisions regarding a sale or purchase of a property, benefits or pension payments. This LPA can be used as soon as it is registered (if you wish that to be the case), even whilst capacity is retained, which offers practical assistance in the event you have capacity, but there is another reason why you require assistance, for example if you cannot leave the house due to shielding or if you find it difficult to speak on the telephone
It is true that the only time that necessitates the need to enact a Power of Attorney is at the point when the donor no longer has the capacity to manage their own affairs. However, by waiting until this point in time, you will already be too late to proactively take control of your loved one’s financial affairs because an LPA can only be signed by the Donor when he or she still has mental capacity. For this reason, it is encouraged to have an LPA drafted and signed at an early stage and before any signs of deterioration in mental capacity.
The only option for taking control of financial affairs after the point of capacity loss is to apply to the Court of Protection to become a ‘deputy’, which allows you to act on someone’s behalf. The application process can be lengthy and is certainly likely to be more stressful than if a Power of Attorney was arranged when a person was in good mental health. Furthermore, the Court will appoint a deputy at their own election and you will not have a say as to who acts on your behalf. The legal costs involved in this process are also significantly more than those associated with having an LPA drawn.
Deciding who toappoint as an attorney may not always be a straightforward or easy choice, especially if there are complex family structures involved. It is important that those who are elected as attorneys understand their responsibilities and have a good general knowledge of what bank accounts, investments, savings, pensions and material assets of worth are involved.
Consulting a solicitor so all of the variables can be considered and to ensure that the documentation is set up correctly is highly advisable.
For more information or to discuss setting up an LPA, please contact Rebecca on 01457 761320 or email Rebecca@odonnellsolicitors.co.uk.
Rebecca O’Donnell is Head of Private Client at O’Donnell Solicitors.