It is a cruel fact of life that 1 person in 20 over the age of 65 will develop dementia. Further any one of us could have an accident, suffer an injury or develop an illness at any time and therefore steps need to be taken to ensure your finances, the wellbeing of your family and your medical wishes are respected.
If something happens to you how will your family cope in these circumstances?
We all need help once in a while. It may only be for short periods of time but sometimes it’s more long term. There are lots of reasons why help may be needed; when recovering from an operation or illness, when paperwork is confusing, stressful and worrying, or just due to becoming forgetful or simply uninterested.
Many people do not realise that your spouse will not be able to access your finances or make decisions on your behalf without further legal authority.
If you were to suffer an illness and were unable, even temporarily to make decisions for yourself then without the correct paperwork in place no one will be able to access your accounts, pay your bills, proceed with your business or make decisions on your behalf without making an application to Court. Such an application can take a very long time and can prove rather expensive.
With a bit of forward planning and taking the time to prepare a Power of Attorney this can all be avoided.
What is a Power of Attorney?
A Power of Attorney is a legal document that authorises a trusted person of your choice to make decisions and take certain actions on your behalf if for some reason you are unable to do so yourself.
There are various types including:
General or Specific Powers of Attorney
A general Power of Attorney, or a Specific Power of Attorney as they are sometimes described (POA), is a short form document that usually authorises a person to carry out one transaction on your behalf. For example where the buyer or seller of a property is unavailable to sign the necessary paperwork to complete the transaction and so appoints another, often a partner in the firm of solicitors which is advising, to act as the Attorney.
The practical purpose of a POA is not only to invest the Attorney with power to act for the Donor, but also to provide him with a document defining the extent of his authority, which he can produce as evidence to the third parties with whom he will deal. In the example, the third party would be the buyer’s or seller’s solicitors.
This type of POA usually has a short shelf life before it needs to be renewed and it is also invalid should the person who has made the document lost capacity.
Enduring Powers of Attorney
Since October 2007 it is no longer possible to make an Enduring Power of Attorney (‘EPA’) but those made before this date remain legally valid.
The idea behind the EPA was that it can continue to be used if you lost capacity at some point in the future. At that stage however the EPA needs to be registered to continue to be used.
If you act as an attorney under an EPA and require assistance in registering the same please get in contact with us.
Alternatively if you have an EPA in place it may be advisable to revoke the same and replace with a Lasting Power of Attorney.
Lasting Powers of Attorney
A Lasting Power of Attorney (‘LPA’) is a document which enables a trusted relative or friend to assist with your finances and other affairs whenever necessary.
There are two types available including:
- Financial Affairs LPA; and
- A Health and Welfare LPA
The Financial LPA appoints a person or persons of your choice to look after your money and property in the event of you becoming physically or mentally incapable.
The Health and Welfare LPA covers all non monetary decisions including medical decisions, where you live and whether you move into a care home and can even cover your preferences regarding life sustaining treatment.
Before use both types of LPA must be registered at the Office of the Public Guardian. We believe everyone should have both types of LPA no matter what their age or circumstances.
It is not necessary to register the LPA until it is needed but we do recommend registration as soon as the LPA is signed so that when needed there is no delay.
It is essential to have an LPA in place before you start to lose capacity as failure to do so will mean the LPA is not legally valid.
For more information download our LPA factsheet here.
Why Bolt Burdon?
Our Wealth and Estate Planning Team include Dementia Friends Champions and members of Solicitors for the Elderly. We are highly experience in dealing with these types of matters and assisting our clients to ensure:
- The legal ramification and implications are properly understood;
- The correct persons are chosen as their attorneys;
- The correct safeguards and restrictions are put in place
We work to very high standards and this is reflected in the feedback we receive from clients and relatives alike.
One client recently described our service as “ …not just exceptional but it was done with a great degree of care and sensitivity, that both my sister and I are greatly thankful for. I can think of nothing that needs to be changed or improved.”
What about end of life decisions?
A Health and Welfare LPA can include a statement authorising your Attorney to make end of life decisions on your behalf but often it is important for them to consider your wishes.
Further if your attorney is not present in the event of an accident it may be necessary for the hospital to be aware of your wishes in advance. For this reason it is worth considering making an Advance Decision.
What about my business?
It is possible to make a financial LPA limited to your business.
This may be appropriate where your spouse, children or other trusted relatives who you have appointed to deal with your personal affairs would not be suitable or would not have the expertise to look after and advance your business affairs.
In these circumstances a Business LPA should be considered.
What if I don’t make an LPA?
As above without an LPA in place no one has the legal authority to make decisions on your behalf.
In the event of an illness or losing capacity the only option for your family will be to make an application to the Court of Protection for a Deputy to be appointed to manage your financial affairs.
The application can be time consuming and is more expensive than making a LPA.
It is very rare for a Deputy to be appointed for Health and Welfare matters as the Court prefers to consider applications on a one off basis whenever there is disagreement.
We can assist with such applications to make sure it runs as smoothly as possible and guide you through the process. In appropriate cases we can also act as a deputy either solely or alongside a family member.
Once the order is made our involvement can continue and we can continue to assist you in carrying out your responsibilities, making sure all relevant insurance is in place, completing annual reports, preparing for supervision and inspections, compiling accounts and completing annual tax returns.
Michael Culver is on the Court of Protection Panel of Professional Deputies and manages and assists numerous clients with their financial affairs. For expert guidance on your duties as an attorney please contact us to make an appointment.