When our elderly parents and relatives seem to be in good health, it is hard to imagine that they might fall ill or lose the ability to make decisions for themselves. It is even harder to contemplate that this might happen to us, especially for those who are not even close to retirement age. Life expectancy has been increasing steadily in the UK over the past few decades (although gains have become smaller since 2011) and it is perhaps no wonder that less than half of UK adults get around to making a Will.
But without doubt, accident or illness can affect anyone. Whilst deaths have been comparatively low in the under 65s age group, the risk of someone aged 30 – 39 years being hospitalised for Covid-19 is twice that of someone aged 18 – 29. This increases to four times the risk for those in the 50 – 64 years age group, and doubles again for those aged 75 – 84 (Source: CDC). In the event that you were admitted to hospital, who would look after your financial affairs?
Many people incorrectly assume that their partner will simply continue to pay bills, manage joint financial assets and access the incapacitated person’s accounts. This is not the case – banks have a duty to protect the assets of the mentally incapacitated person. Consequently they will freeze any accounts held solely in the incapacitated person’s name and may restrict the use of joint accounts to essential transactions only, line with guidance from the BBA. Full access will then only be granted once a Deputyship Order is obtained from the Court of Protection, which can take a substantial amount of time and money. Any attempt to gain access before obtaining the proper order and registering it with the bank may constitute an offence under sections 1 and 2 of the Computer Misuse Act 1990.
Another myth is that the Executors and Trustees in your Will can manage your affairs. Again, this is completely untrue. A Will takes care of your affairs once you have passed away. A Lasting Power of Attorney dictates who can make decisions for you whilst you are alive, should you be unable to make them for yourself.
There are two types of Lasting Power of Attorney for those in England and Wales: one for property and financial affairs, and the other for health and welfare decisions. The financial decisions LPA can be used with your permission at any time once it has been registered, making it a very valuable document that can help even whilst you have capacity.
Managing Partner Scott Ewart of Scottish-based legal services firm Thomas Bradley and Co explains:
“People tend to think in terms of a crisis, such as someone being affected by Alzheimer’s, but power of attorney can be important for someone who is just struggling physically. I think of my grandmother who at 86 is mentally as sharp as a tack but set up a power of attorney as through illness she simply wasn’t able get out to take care of basic essentials such as going to the post office for her pension. Someone may also need their son or daughter to make sure gas or electricity bills are looked after and that the shopping is done”.
Similar help may be valuable whilst you are temporarily incapacitated in hospital – or simply taking an extended holiday abroad!
Choosing and appointing attorneys correctly
Making a Lasting Power of Attorney allows you to choose people you trust completely, to make decisions for you. Whilst under the Mental Capacity Act your attorneys must try to involve you in decisions where feasible, sometimes this won’t be possible. Your attorneys could, therefore, be making significant and perhaps difficult decisions for you.
Once you have chosen attorneys – which may be different for your financial LPA and health LPA – you will need to decide how to appoint them. Your attorneys can be appointed to act ‘jointly’, ‘jointly and severally’ or ‘jointly on some matters, severally on others’.
Having more than one attorney and choosing substitutes helps to share the responsibility. However, dictating that attorneys must act ‘jointly’ can cause significant problems, so it is always advisable to speak to a professional first before choosing this option.
Once you have made your LPA you can revoke it at any time and make a new one whilst you have mental capacity. You can also partially revoke it by removing one of your attorneys, provided that they were not appointed jointly.
Using a legal professional for drafting and checking
It is possible to make a Lasting Power of Attorney online without the help of a legal professional. However, LPAs are important documents that grant a lot of power. A legal professional will be able to advise on the best way to appoint your attorneys and to include any appropriately drafted preferences, instructions or limits on power that you would like. Although the Office of the Public Guardian does check documents before registering them, it will not comment on any badly drafted clauses or possible future issues with how you have appointed your attorneys.
Further, a legal professional will be your ‘Certificate Provider’, confirming that you have the capacity to make the document and understand its contents. This saves a visit to the GP and the associated delays and expense. Typically GPs charge a fee to complete the required Certificate – this varies but can be around £100.
Finally, a professional will ensure that the multiple documents required are signed off in the correct order by you (the donor) and your choice of attorneys. Ensuring everything is technically correct and facilitating the proper registration of your documents can be the most important, yet most onerous, part of the process.
We offer a free information pack and a one hour free appointment to discuss making a Lasting Power of Attorney and/or Will, without obligation. Call us on 0800 788 0500 9am – 5pm Mon – Fri to book.