Lasting Power of Attorney
Have you considered what would happen if you become unable to handle your own financial and medical decisions?
By having a Lasting Power of Attorney (LPA) in place, you will have peace of mind that your wishes will be acknowledged and someone will be able to make decisions on your behalf.
People can lose capacity, often due to a medical event, and incapacity can continue for long periods.
Unfortunately, people often associate incapacity with a slow degenerative condition, such as dementia, which may allow plenty of time to arrange any legal documents before capacity is fully lost. However, whilst dementia is a common cause of incapacity, there are many other ways capacity can be lost without warning, such as a stroke, heart attack or trauma injury.
What happens when you lose capacity?
When you lose capacity all assets you hold in your own name become frozen. This means no transactions can be carried out on anything, including bank accounts, property, savings or pensions. This also includes everyday accounts, which cannot be changed or stopped, such as gas, water, electricity, broadband, gym membership, etc. This is because only you have authority to operate your accounts and you have lost the capacity to do so.
Your partner and dependents could be faced with problems such as:
- Not being able to access any money held in accounts, savings or pensions in your name
- Not being able to access any joint bank accounts they hold with you
- Not being able to give instructions to utility companies where you are the account holder
- Not being able to sell any property you own jointly, even where the intention is for your benefit, such as assisted living
- Perhaps the most unpleasant surprise for people who find themselves in this situation is that assets you hold jointly also become frozen. This includes joint bank accounts and jointly owned property.
This can often cause undue financial hardship and distress at a time when they’re trying to cope with a life-changing event.
The Court of Protection
To obtain authority to handle the affairs of someone who becomes incapacitated without Lasting Power of Attorney, an application to the Court of Protection is required. This is an onerous process and you’ll be required to pay for medical reports, solicitors, barristers and court fees. Typical timescales for the process are close to a year and cost, on average, £10,000.
There’s also no guarantee the application will be successful and even where it is, you may not obtain authority if there are multiple competing applications from other family members or friends.
What Does A Lasting Power of Attorney Do?
A Lasting Power of Attorney (LPA) allows you to plan in advance and gives reassurance, not just to you but to your family, in the event that you are no longer able to make your own decisions. Your appointee must act in your best interests at all times.
Loss of mobility or illness can make it difficult to manage your affairs. An elderly relative losing capacity is difficult enough for loved ones to deal with, without the added worry that finances are becoming muddled. The prospect of unpaid bills can cause unnecessary stress and anxiety, and delay someone's recovery. Having someone you know and trust and more importantly understands you, to manage your affairs, is far preferable than to a court official.
By creating a Power of Attorney in advance, ensures that if the worst were to happen, you can rest assured that both your financial affairs and personal welfare are in safe hands.
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About Chestnut
We are here to provide you and your loved ones with accurate and reliable advice around setting up Lasting Powers of Attorney.
The use of a professional, experienced adviser during the process of applying for an LPA is essential to avoid any mistakes which could mean that your documents are rejected by the courts, adding time, money and stress to the process.
We have lots of experience advising about, and writing, LPAs.
We'll discuss all your options, in the comfort of your own home.
Ian Francis is a fully qualified member of the Society of Later Life Advisers, having demonstrated his professionalism in giving advice for those clients looking to the future and undertaking professional qualifications, as an independent financial adviser.
Ian is also a fully qualified member of the Personal Finance Society, since 1994. He has built his expertise with numerous qualifications and professional development each year.
"I Haven't Lost My Marbles"
When talking about powers of attorney, I sometimes hear something along the lines of 'I don't need a power of attorney - I haven't lost my marbles'.
That's precisely the point!
A Lasting Power of Attorney (LPA) is designed to ensure you choose someone you trust to represent you and to make decisions on your behalf if you are unable as it's too late at that stage to make an LPA.
There are, unfortunately, many high profile instances of people suddenly rendered incapable whilst in the prime of life.
There is no money saved by waiting, and why not be protected from now?
I had to go to someone recently who unfortunately left it too late... so sad, and so important to look after yourself and your loved ones.
Please note: Tax and estate planning services are not regulated by the Financial Conduct Authority.
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