What is a Lasting Power of Attorney?
A Lasting Power of Attorney is a document that allows you to nominate someone to manage your affairs, should you lose mental capacity. There are two types: one for decisions about property and finances, and the other for decisions about health and care.
Why is Denzil Lush concerned?
Much of the media attention has been on an isolated case – that of Frank Willett, who nominated his neighbour Colin Blake to be his attorney. The neighbour took all of Frank’s money together with his medals, his late wife’s wedding ring and jewellery, all the family photographs and his documents.
Are the concerns justified?
A Lasting Power of Attorney gives someone the power to manage your finances, without being questioned by financial institutions. If you put this kind of power in the hands of someone you do not know or trust, there are huge risks.
However, just as you wouldn’t give a stranger your bank card or house keys, you also wouldn’t give this kind of power to someone you did not know or trust completely.
The fact that a small number of people have chosen their attorney unwisely does not make the Lasting Power of Attorney in any way less essential.
For millions of others, this valuable document allows their finances and affairs to be effectively managed by someone close to them.
Are there any safeguards?
Contrary to the Judge’s comments there are a good number of safeguards in place to protect those making a Lasting Power of Attorney from financial abuse.
- Firstly, you can nominate a person you trust to be your Attorney, should you lose capacity. Without a Lasting Power of Attorney, anyone can apply to the Court to carry out this role on your behalf.
- Second, you have the ability to nominate more than one attorney and to decide whether they can act alone or must consult each other before making decisions. You can choose to allow some decisions to be made jointly and others severally.
- Thirdly, you can restrict your attorneys’ powers if you feel this is necessary.
- Finally, when you make a Lasting Power of Attorney, you can elect to notify friends and family. This ensures that should you lose mental capacity, those close to you are aware of who will be managing your affairs.
- If a friend or relative has a concern about how finances are being managed, they can apply to the Court for the Attorney to be removed. Mr Lush himself acknowledges that such applications are made and that the Court acts swiftly to prevent abuse.
The cost of doing nothing.
For those who lose mental capacity without making a Lasting Power of Attorney, the costs can be far higher.
As Paul King explained to the Financial Times:
“Once a bank realises that one person has lost mental capacity to carry out financial matters the assets are frozen and even the joint holder of the account cannot get access to that money”.
Someone will have to apply to the Court for a ‘Deputyship Order‘ to act on their behalf, and this might not be the person they would have chosen. In other words, with a Lasting Power of Attorney YOU decide who you trust to manage your finances. Without a Lasting Power of Attorney, the person managing your affairs could be the first person who applies to the Court and indeed, someone you do not trust at all.
The time taken to deal with the Deputyship application is substantial – typically 3 months or more – and in the meantime, your accounts cannot be touched.
The financial cost is also substantial. While Mr Lush cites the Court of Protection’s annual supervision fee of £320 as a small price to pay for peace of mind, this is entirely misleading – the cost of a Deputyship Application is substantial. Fees and expenses for making each of the types of Deputyship Order include:
|Deputyship order – health and care||Deputyship order – finance and property|
|Court application fee||£400||£400|
|Hearing fee (if necessary)||£500||£500|
|New deputy fee (for each deputy)||£100||£100|
|Annual supervision fee||£320||£320|
|Bond||Example: for a £60,000 bond, £45/year||Example: for a £60,000 bond, £45/year|
|Legal fees||Typically around £1,000 + VAT||Typically around £1,000 + VAT|
|Doctor’s fees for report||Approx £50||Approx £50|
By contrast, the costs of making a Lasting Power of Attorney include:
- Legal fees (these vary – April King Legal’s fees are highly competitive)
- Cost of registration – Nil, £41 or £82 dependent on your income
Speak to us about making a Lasting Power of Attorney – we offer a free consultation at our UK-wide locations or in your home, without obligation. Call 0800 788 0500 or email email@example.com to arrange your meeting.