If you have recently received a diagnosis of dementia, it is important to organise your legal and financial affairs while you are still able to make decisions for yourself. This will ensure that in the future, managing your finances will not be a burden to you – and eventually, the people you trust will be able to help you. If a close friend or relative has received the diagnosis, you should try and help them deal with these aspects as quickly as possible. If you have symptoms and are expecting a diagnosis, do not wait before taking steps to put your legal and financial affairs in order.
NB: If you are concerned about a friend or relative who has already lost mental capacity (the ability to make decisions for themselves), we can help you obtain a Deputyship Order – click here.
Lasting power of attorney
A Lasting Power of Attorney gives someone you choose the right to make decisions for you regarding your finances or health and welfare. You can choose more than one person.
A diagnosis of dementia does not automatically mean you are unable to make a Lasting Power of Attorney. Anyone can make a Lasting Power of Attorney, provided that they have mental capacity (the ability to understand/make the decision). Regardless of your dementia diagnosis, you can make a Lasting Power of Attorney if you are still able to understand what is involved in making this document and the implications it has.
Having mental capacity doesn’t mean you have to understand every decision that you’re faced with. You might, for example, struggle to understand complex medical decisions in relation to your care. This doesn’t mean you can’t fully understand the concept of handing the management of your finances over to someone you trust. The mental capacity required is just in relation to making the Lasting Power of Attorney document and understanding its implications.
There are two types of Lasting Power of Attorney – one for Finance/Property, and the other for Health/Welfare. You don’t have to make both types, but we strongly advise that you do.
Finance/Property Lasting Power of Attorney
Once made and registered, the Finance/Property Lasting Power of Attorney can be used straight away, with your permission. This is extremely useful as it allows you to nominate someone to help with your finances if you are already finding this task difficult. Once you lose mental capacity, they can continue managing your finances for you using the document. The document allows them to help with things like:
- paying household bills;
- paying for care;
- claiming any benefits you might be entitled to;
- collecting those benefits; and
- collecting your pension or allowances for you.
If necessary, it also allows them to make and sell investments on your behalf, and to buy or sell your home. You can limit your Attorneys’ powers but remember that they must always act in your best interests.
Health/Welfare Lasting Power of Attorney
The Health/Welfare Lasting Power of Attorney can only be used once (a) it has been registered and (b) once you have lost mental capacity. This allows someone you choose to make decisions for you on matters such as:
- the type of medical care you receive;
- whether you stay in your home or move into residential care;
- what you eat from day to day; and
- your daily routine – dressing, going out etc.
Note that for both types of Lasting Power of Attorney, your Attorney(s) may only make decisions for you when you cannot make them for yourself. So, for example, you may be perfectly capable of deciding what you’d like for lunch – and even deciding that you’d rather receive care in your own home! But you may struggle to make decisions regarding finances, and this is where your Attorneys will step in to help you.
Q: What happens if I don’t make a Lasting Power of Attorney?
It is really important to make a Lasting Power of Attorney as quickly as possible while you still have mental capacity as the rate at which dementia progresses is different for everyone. If you do not make a Lasting Power of Attorney before you lose mental capacity, your relatives or friends will have to apply to the Court of Protection to get an order (called a ‘Deputyship Order’) allowing them to help with your affairs. Obtaining the Order is a long-winded, expensive and intrusive process. It’s also worth considering that the person who obtains the Order might not be the person you trust the most, or would have chosen yourself. Click here to read more about Deputyship Orders.
Q: Should I set up an Ordinary Power of Attorney first?
Some advisory websites suggest that you might want to set up either an ‘Ordinary Power of Attorney’ or a ‘Third Party Mandate’ first. This is, frankly, poor advice. Although legally you can set up an Ordinary Power of Attorney or Third Party Mandate whilst you still have mental capacity, this is not advisable once you have had a diagnosis of dementia. The reason is that an Ordinary Power of Attorney or Third Party Mandate can no longer be used once you lose mental capacity – and at this point, you won’t be able to make a Lasting Power of Attorney either. This means that your relatives or friends would then have to obtain a Deputyship Order and, as mentioned above, this is a lengthy, expensive and challenging process.
Since a Finance/Property Lasting Power of Attorney can be used once registered with your permission, you should make this document now, rather than an Ordinary Power of Attorney.
Q: Who should I choose as my attorney?
Your choice of attorney is entirely up to you. They might be your spouse, civil partner, partner, sister or brother – or just a family friend. You can also choose a professional such as an accountant or lawyer. If you choose more than one attorney, you will need to decide whether they can act independently or whether they must make decisions together. You can allow them to make some decisions independently and others jointly if you prefer. You should also choose replacement attorneys in case one of your attorneys cannot, or becomes unable to, act. It is strongly advisable to take legal advice on how you appoint your attorneys and what powers to give them as this particular aspect of the document can render it useless if drafted incorrectly.
Making or changing your Will
You may be surprised to learn that a diagnosis of dementia doesn’t automatically preclude you from making a Will, or from updating your existing Will. As for the Lasting Power of Attorney, you can make or update your Will provided that you understand the decisions you are making and the implications of any changes.
Again, it is incredibly important to address this issue while you still have mental capacity. There is no way of knowing how quickly your dementia will progress. If you lose mental capacity, you can’t make a Will or change your existing Will. You should therefore avoid any delay in getting these matters sorted.
Confirming mental capacity
Note that if you are making a Lasting Power of Attorney with a lawyer, they will have to certify that you have the mental capacity to understand your decisions. As noted above, having sufficient mental capacity to make a legal document does not require that you can understand and comprehend every single decision that you are asked to make. The mental capacity required is just in relation to understanding the implications of making a Lasting Power of Attorney.
If you want to make a Lasting Power of Attorney yourself (without the help of a lawyer), you still have to get Mental Capacity Certification from a suitable person. We would strongly suggest, given that you have a diagnosis of dementia, that you use a qualified, experienced lawyer – otherwise the document could be challenged in the future.
Similarly, if you are making a Will, we strongly advise that you use a qualified, experienced lawyer rather than trying to make the Will yourself (for example, using some sort of DIY Wills kit). The fact that you have been diagnosed with dementia would almost certainly provide grounds to challenge the Will after your death. This might mean that your assets are not distributed in accordance with your wishes. A lawyer will be able to note your diagnosis and confirm that they are satisfied that you have the mental capacity to understand the decisions you are making.
If your lawyer is unsure about your mental capacity, they may need to refer to your healthcare provider for guidance.
Practical financial steps
There are a number of practical ways you can ease the strain of a dementia diagnosis. First, consider switching all your bills to direct debit payments so that everything is done automatically for you. Aside from not having to remember to pay them, you will likely save some money paying this way – particularly on utilities.
If you are already experiencing memory problems, you could ask your bank for a ‘chip and signature’ card. This require you to sign a receipt rather than enter a pin number – just like the old system before ‘chip and pin’ was introduced. You will have to go into the bank to withdraw money (rather than using a cash machine) and you won’t be able to use the self checkouts at the supermarket, but the key benefit is that you won’t have to remember a pin number. According to the RNIB, all shops should accept ‘chip and signature’ cards because this is a reasonable adjustment to make to their service so that it’s accessible to you.
Contactless cards also allow payment for small purchases (up to £30 per transaction). Using these, you simply touch your card on the payment terminal and the payment is taken.
Getting help with care costs
If you are already paying for care, make sure that you have had an assessment for Continuing Healthcare funding. Healthcare professionals may not have immediately mentioned this little-known source of funding – perhaps instead focusing on whether you have the means to fund the cost of care yourself. The assessment process is in two stages – first, a checklist is completed by a healthcare professional involved with your care – and second, if a need is identified, a more thorough assessment is carried out by two healthcare professionals. If you qualify, all of your care costs will be paid for – regardless of your income or assets. Read our article on NHS Continuing Healthcare to find out more.
Call our team to make a Lasting Power of Attorney and Will. We have locations across the UK and offer a free appointment without obligation. We can also cater for home visits. Please mention that you have received a diagnosis of dementia so that we are aware of the urgency.