Documents you should always have in your pocket
You may already be familiar with a Lasting Power of Attorney or you may have read about them or have spoken to family or friends who have mentioned them to you. However have your family and friends also mentioned the problems of not having a Lasting Power of Attorney in place?
What are some of the issues of not having a Lasting Power of Attorney (LPA)?
Should you become incapacitated at any time, for example if you were to have a stroke, then without a Lasting Power of Attorney, legally it would not be possible for anybody to deal with your affairs on your behalf. Certainly in so far as any matters requiring a signature or where legally enforceable decisions were concerned.
A person’s mental capacity can fluctuate from time to time. Certain medication can affect your physical and mental health and even short term ailments can mean that a decision you would have previously made without any assistance or hesitation, can become difficult or impossible.
In the event of being incapacitated for a long period of time it may be necessary that the Court of Protection appoints someone to look after your affairs and act on your behalf. The Court of Protection would normally appoint your next of kin who would be legally known as your Deputy. However, if family cannot be located the Court of Protection may appoint a government authority such as Social Services to be your Deputy. If the health situation does not improve and the incapacity becomes permanent this appointment will remain.
Involving the Court of Protection is both costly and time consuming. An appointed Deputy is only allowed to make mundane decisions on your behalf and has to refer bigger decisions back to the Court. The Court will charge an annual fee and also require an annual return including all receipts and payments. Most importantly, you have no control over who your Deputy might be and you could find that the person you would least wish to do so is appointed to look after your affairs.
If you have assets in joint names, problems can still arise. The signatures of all co-owners will be needed before shares or a house can be sold. Banks are tightening up on their procedures for dealing with customers who present themselves as having the verbal authority to deal with another individual’s banking. Gone are the days when you knew the person behind the counter who dealt with you and your family at the bank for a number of years. A Lasting Power of Attorney can prevent these delays, issues or any other problems that could arise when dealing with banks or having jointly owned assets.
What is a Lasting Power of Attorney (LPA), and how can it help me?
A Lasting Power of Attorney (LPA) avoids having to go down the Deputyship route so that if you ever lack sufficient mental capacity to deal with your affairs, you have taken measures so that your financial affairs will continue to be dealt with. The document can operate as a general power while you remain fit and healthy and it will then automatically become useable should you become mentally incapable.
However, to have an LPA you must have mental capacity to enable you to sign the Lasting Power of Attorney allowing you to appoint one or more people to act as your Attorneys prior to becoming ill. For the LPA to be legally binding, it has to be registered at the Office of the Public Guardian before it can be used. This is a substantially easier and quicker procedure than having to appoint a Deputy in the case of not having a Power of Attorney available.
Registration does not mean you are incapable. You can still manage your assets or you can delegate all or part to your Attorneys. If you are losing mental capacity the Attorneys are under a duty to consult with you and to assist you in making decisions that you are capable of making.
Anyone over the age of 18 can make a LPA, if they have the capacity and there are two types:
1. Lasting Power of Attorney – Property & Affairs
This allows you to nominate someone (the Attorney) to make decisions on your behalf about your money and your property. Your Attorney can also act for you while you still have the capacity to make your decisions, for example if you are out of the country for long periods of time or have physical difficulty when managing your affairs.
2. Lasting Power of Attorney – Health & Welfare
This allows you to nominate an Attorney(s) to look after your physical wellbeing. Decisions under this form of LPA may be about whether to give or refuse consent to medical treatment or about where you live. Your Attorney(s) will only be able to make these decisions for you when you no longer have mental capacity, for example if you are unconscious or have been diagnosed with the onset of conditions such as dementia. Your Attorney(s) cannot refuse life-sustaining treatment unless you say so in your LPA.
Your primary consideration should be that your Attorney(s) is someone you can trust to make decisions in your best interests. You can choose anyone over the age of 18 who is not bankrupt at the time of signing and you can appoint as many as you wish.
What is an Enduring Powers of Attorney?
You may have previously been advised, pre October 2007, to make an Enduring Powers of Attorney (EPA). LPAs have replaced Enduring Powers of Attorney. If you already have a valid EPA, the introduction of the LPA will not invalidate it. You can choose to revoke your EPA and replace it with an LPA or you can keep your EPA and create an LPA Health & Welfare as well to look after your physical wellbeing. However, if you make regular gifts, there is an advantage to switching to an LPA.
For further information concerning the benefits of a Lasting Power of Attorney or any other advice on Wills, Trusts & Probate please contact the Wills, Trusts & Probate team on 01733 882800 or email at [email protected].
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