Powers of Attorney
If you’re worried about losing the ability to manage your own affairs, we understand that sometimes in life it’s necessary to ask others to make decisions on your behalf therefore you may want to consider making a Lasting Power of Attorney (LPA). This means you appoint someone else to make decisions on your behalf if you lose mental capacity.
Why might you need a Lasting Power of Attorney (LPA)?
There are approximately 850,000 people with dementia in the UK, including 1 in 6 of people aged over 80. These numbers are set to rise to over 1 million by 2025 and to 2 million by 2051. Dementia is now one of the main reasons why people go into a Care Home and 70% of people in care have dementia or severe memory problems.
In the year to end of April 2019 more than 844,000 Lasting Power of Attorneys (LPAs) were implemented and registered, an increase of 6% on the previous year and means that around 3 million have been put in place since LPAs they were introduced. These numbers are still far too low.
We advocate that many more people should be putting LPAs in place earlier in life, just like a Will. LPAs act as an insurance policy because, in our experience, it is not just the elderly who lose decision-making capacity. Anyone can, at any time.
Many people who do not have LPAs in place run the risk of causing extra stress, concern and expense for their family, while their own wishes about their finances or health might not be taken into consideration.
What if you lose the ability to mange your own affairs?
If you lose the ability to manage your own affairs as a result of an accident or illness and don’t have a Lasting Power of Attorney in place, your spouse or partner will not be able to access your assets or manage your financial affairs and your family would have to apply to the Court of Protection for a Deputyship Order to secure your benefits, arrange appropriate care and access insurance payments or pension benefits.
Here in Norfolk and Suffolk, we have advised many people on the benefits of creating a Lasting Power of Attorney or obtaining a Deputyship Order.
One document that relieves this stress on families is a Lasting Power of Attorney. This gives family members the authority to handle the financial affairs of loved ones and should be created long before they are needed.
Lasting Powers of Attorney – why might I need one?
There are a number of reasons why you might need someone to act and make decisions on your behalf, for example:
- This could be a temporary situation: for example, if you’re in hospital and need help managing your finances.
- If you’ve been diagnosed with dementia and you later lose the mental capacity to make your own decisions.
- To avoid Court intervention.
- Let people you trust to make decisions concerning life-sustaining treatment when you can’t.
For initial guidance about Lasting Power of Attorney call our advisors in Norfolk and Suffolk on 0333 1300 509 or contact us online and we will help you.
If any of the above applies to you – Don’t leave it to chance. Create an LPA today.
In most circumstances, we advise to have both a Property and Financial Decisions LPA and a Health and Care LPA.
The Financial Decisions LPA covers areas like managing bank accounts, paying bills and collecting benefits. The Health and Care LPA can cover your daily routine, for example washing, dressing and eating, medical care and moving into a care home. You can also give special permission for your attorney to make decisions about life-sustaining treatment and ensure your specific medical needs are undertaken.
These documents can only be created while the Donor (the person who is appointing their Attorneys) holds the required mental capacity. This means the Donor must have the ability to make or communicate specific decisions at the time the LPA is made. To have mental capacity, you must understand the decision you need to make, why you need to make it, and the likely outcome of your decision.
Some people will be able to make decisions about some things but not others. For example, they may be able to decide what to buy for dinner, but be unable to understand and arrange their home insurance. Alternatively, their ability to make decisions may change from day to day.
It’s important to understand that existing Enduring Powers of Attorney you may have, won’t cover personal care and welfare issues, so a Health and Care LPA should be created.
If you have an existing Enduring Powers of Attorney in place, we would advise that this is also reviewed.
What happens if I do not have these documents?
If you do not have a Lasting Power of Attorney in place and you lose mental capacity, your family will need to apply to the Court of Protection so they can appoint Deputies to make decisions on your behalf. The Court of Protection will decide who to give the responsibility to and what they can do. This is often an expensive process. For more information please look at our section on Court of Protection.
Other types of Powers of Attorney.
A General Power of Attorney
A General Power of Attorney allows you to appoint one or more persons, known as your attorney, to make decisions on your behalf. This general power of attorney allows you to give legal permission to someone else to make decisions and sign documents on your behalf. It is only for use when you still have mental capacity but are unavailable to act in person for some reason. You may want to set one up if, for example:
- You need someone to act for you for a temporary period, such an when you’re on holiday or in hospital.
- You are in the process of undertaking Corporate Transactions, such as buying a company.
- You want someone to act for you while you’re able to supervise their actions.
You can limit the powers you give to your attorney so that they can only deal with certain assets, for example, your bank account but not your home.
A general power of attorney is only valid while you have the mental capacity to make your own decisions. If you want someone to be able to act on your behalf if there comes a time when you don’t have the mental capacity to make your own decisions, you should consider setting up a Lasting Power of Attorney instead.
Enduring Power of Attorney (EPA)
EPAs were replaced by Lasting powers of Attorney in 2007. If you made and signed an EPA before 1 October 2007, it should still be valid. An EPA covers decisions about your property and financial affairs, and it comes into effect if you lose mental capacity, or if you want someone to act on your behalf.
We will happily review the validity of any EPA and we can register them with the Office of the Public Guardian.
Without a Power of Attorney in place, it will become necessary to apply to the Court of Protection for a Deputyship Order when the time comes in order to gain the necessary legal authority to act on a person’s behalf.