What is a Lasting Powers of Attorney?
A Lasting Power of Attorney is a legal document that allows you to appoint one or more people to make decisions on your behalf during your lifetime. The people you appoint to manage your affairs are called the Attorneys. A Lasting Power of Attorney is a completely separate legal document to your Will although many people put them in place at the same time as getting their Will written, as part of wanting to plan for the future.
Why is a Lasting Power of Attorney so important?
Once you have a Lasting Power of Attorney 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 during your lifetime. This may occur, for example, because of an illness or old age or an accident.
Having a Lasting Power of Attorney (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 Lasting Power of Attorney can include binding instructions together with general preferences for your attorney to consider. Your Lasting Power of Attorney should reflect your particular wishes so you know that the things that matter most would be taken care of.
Act now to help your family if you lose mental capacity
According to recent research by the Alzheimer’s Society, there are around 800,000 people in the UK suffering from some form of dementia at present. The number of sufferers is expected to reach one million within the next eight years. For the people affected and their families, this diagnosis can be devastating. While coming to terms with the emotional impact of the disease, the practical aspects of what this means for dealing with the person’s affairs can sometimes be overlooked.
Who will be looking after your finances if you are no longer able to do this yourself?
What if you have to go into care and the fees need to be paid from your bank account or the house needs to be sold?
Lasting Powers of Attorney is a powerful tool
The answer to solve these difficulties can be very simple. By setting up a Lasting Power of Attorney (LPA) you can appoint people you trust to look after your affairs in case you lose mental capacity.
The important point about these documents is that they need to be set up while there is no doubt over the clarity of mind of the person making them, in technical jargon, while they still have “capacity”. In fact, it is such an important and useful document that in the opinion of many professionals it is something everyone should set up, regardless of their age or state of health.
Frozen joint accounts
Some might think that no such arrangements would be needed in their situation, as their spouse would still be able to deal with matters. However, this often is not the case. For example, joint accounts may actually be frozen by the bank if one of the account holders loses capacity. This is because when a joint account is set up, both parties effectively give a continuing authority to each other to access the account alone. If one party loses capacity, their authority/consent for the other joint holder to use all of the funds ends. This means that not only is the money of the incapacitated person no longer available, but it could also leave their spouse in an invidious position as they will no longer be able to access joint current accounts or similar.
Court of Protection
If you lose capacity suddenly and no Lasting Power of Attorney has been set up, relatives will have to apply to the Court of Protection (COP) to be appointed as a ‘deputy’ in order to deal with the affairs of the incapacitated. This involves completing a 50 page document giving a vast amount of personal information about the applicant, their finances and other family members. The application process takes several months and even without any professional help will be very costly. If the assistance of a solicitor is required, the costs can run into the thousands.
Once they have got through this complicated, time consuming and expensive application process and are fortunate enough to be appointed as deputy, they will only be allowed to deal with sums of up to £500 at any one time. Handling any amounts in excess of this will once again have to be approved by the COP meaning potentially more delays, forms, and fees.
On top of that, the deputy’s running of their relative’s affairs will be scrutinised by the COP and they may be required to provide a detailed account of all the money that has been spent. Of course, the government body will charge for this supervision and their annual fees can exceed £1,000.
The COP takes its duty to protect the interests of vulnerable people very seriously. This is of course important in order to safeguard against any abuse of powers and mistreatment of the incapacitated. However, for the vast majority of people who are trying to do the right thing by their relative, the amount of red tape and underlying tone of distrust can be upsetting and draining at an already challenging time.
Type “Court of Protection” into the search facility of the forum on the Alzheimer’s Society’s website and you will find a stream of complaints about the difficulties in dealing with this officious apparatus.
Finally, the person who is applying to take over your affairs may not be the person you would want. Maybe even worse, the court could decide they are not suitable and appoint the local authority or a solicitor instead, resulting in a stranger dealing with your affairs as well as even more cost and delays.
Setting up an LPA is the better option
All these problems can be avoided by setting up a Lasting Power of Attorney while someone is fit and healthy.
This enables you to choose exactly who you would like to deal with your affairs and also imposing any restrictions and giving guidance to your attorneys as you see fit. Although this is an area many people like to avoid thinking about, you are saving your family from so much worry and problems in case the unthinkable happens. Also, once it is done, it gives peace of mind rather than niggling at your conscience as one of those things you know you should sort out.
LPA for Property and Financial Affairs and LPA for Health and Welfare
There are two types of LPA. The LPA for Property and Financial Affairs (LPA PFA) discussed above is for appointing people to look after all your financial matters. There is also an LPA for Health and Welfare (LPA HW).
You can appoint attorneys which can be the same or different ones to those under any LPA PFA you may have. This would enable them to make decisions on your behalf if you became unable to make them yourself. This would include areas such as which nursing home you should live in, the level of care you are to receive, which social or cultural activities you should partake in, consenting to any medical treatment, etc.
Lasting Power of Attorney Application Fee
Before a Lasting Power of Attorney can be used by your attorney it must be registered with The Office of the Public Guardian (OPG). They charge a registration fee of £82 per Lasting Power of Attorney. If you would like us to register your LPA for you then we will ask you to provide this payment.
However, there can be an exemption for people who receive certain means-tested benefits, and a 50% fee reduction may be available based on the applicant’s financial circumstances or a reduction based on the applicant receiving Universal Credit.
Farani Taylor Solicitors fixed fee Lasting Power of Attorney does not include The Office of the Public Guardian registration fee.
Benefits of Writing a Lasting Power of Attorney with Farani Taylor Solicitors
- Dedicated LPA specialist to look after you throughout the process
- A full assessment of your needs and explanation of your options
- We will prepare all the necessary Lasting Power of Attorney documents for you to sign
- Fixed fee prices are agreed before any work on your LPA is undertaken
For peace of mind, we can take full responsibility for the registration of your Lasting Power of Attorney with the Office of the Public Guardian (OPG), which will require payment of both our fixed fee and the OPG registration fee which is currently £82 per each application.
This article is authored by Zahur Chowdhry, Head of Islamic Wills. Reach him at +44 207 242 1666.