Once you have a LPA in place you can have peace of mind that there is someone you trust to look after your affairs if you became unable to do so yourself.
Having a LPA in place can allow your attorney to have authority to deal with your finances and property as well as make decisions about your health and welfare. Your LPA can include binding instructions together with general preferences for your attorney to consider.
You can only put a LPA in place whilst you are mentally capable of understanding the nature and effect of the document. After this point, you cannot enter into a LPA and no one can do so on your behalf.
Types of Lasting Power of Attorney explained
There are two types of LPA:
A Property and Financial Affairs LPA allows you to name Attorneys to deal with all your property and financial assets. The LPA document can be restricted so it can only be used if you were to lose mental capacity, or it can be used more widely, such as if you suffer from illness, have mobility issues, or if you spend time outside the UK.
A Health and Welfare LPA deals with your day-to-day healthcare, medical treatments and social care arrangements if you lose the ability to make those decisions yourself. Unlike the Property and Financial Affairs LPA, this document will only ever become effective if you lack the mental capacity to make decisions for yourself.
With the dramatic increase in investigations into attorneys and errors on LPAs by the Office of the Public Guardian (OPG), it is important that you seek advice of experts, such as our team here at Farani Taylor Solicitors.
For peace of mind, we can take full responsibility for the registration of your LPA with the OPG, which will require payment of both our fixed fee and the OPG registration fee which is currently £82 per each LPA.
Often, lasting powers of attorneys (LPA) are associated with being elderly. However, this is a misconception that needs to be addressed.
It is estimated that only 6% of the population have either a LPA or Enduring Power of Attorney (EPA). A LPA is a failsafe to ensure that your estate continues to function according to your wishes and that your health is managed as per your instructions.
A LPA is a legal document that enables a chosen attorney to look after your affairs or make decisions on your behalf if you are incapacitated. They can only be used in the circumstances specified in the document.
There are currently 850,000 people with dementia in the UK and the Alzheimer’s Society have published data that suggest there will be 1 million by 2025 and 2 million by 2051. They state that 1 in 6 people over the age of 80 have some form of dementia. The increasing numbers of those losing capacity have meant that LPAs are becoming more needed.
They are needed by all not just the elderly. Younger people are increasing more active and engaging in various extreme activities, whether skiing, hand-gliding, surfing, climbing or general sport. All of which carry risk, we are willing to buy insurance but not generally insure ourselves against the lasting consequences.
Many take out financial personal protection such as pensions and insurance but do not put in place fail safes to protect their finances. It is estimated that 350,000 people have income drawdown schemes that are unable to access their finances because they have become incapacitated and do not have a LPA in place. Therefore, need a deputyship order to utilise the drawdown. They could have used these funds to finance their care, however local authority is likely to place a charge on the property instead.
If you become incapacitated then you will need someone to manage your affairs. Without a LPA you have no one designated to do so and would need to go through the Court of Protection to gain the authority, which is time-consuming and expensive.
If you do not have Lasting Powers of Attorney in place then your loved ones need to apply for a deputyship order on your behalf. This is when you make an application to the Court of Protection to act on behalf of someone else that lacks the capacity to make such decisions.
There are fees, there are the legal drafting fees should you get a law firm to draft the Court of Protection application. To become a deputy, you must also pay the application fee of £400. This means for both Financial and Health there is an £800 fee together.
If the court decides there should be a hearing then there is a further £500 fee. Once the application is complete there is an ongoing £320 fee for general supervision (or £35 fee should your estate be under £21,000). There is also a £100 assessment fee as a new deputy.
Deputyship Orders are different to Lasting Powers of Attorney and although similar they may not control the whole estate. It depends on whether the Court allows them or the remit of the application.
It is very rare that the court would give full agreement to deputies having rights to make all Health decisions.
Deputies need to report annually to the court what they have done including annual accounts.
If you are looking for help and guidance or have a question relating to Lasting Powers of Attorney, please contact us today on +44 (0)20 7242 1666.
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