- 29th May 2019
- Posted by: steve mills
- Category: Blog, Tax
Everybody over eighteen should have a lasting Power of Attorney in place according to official advice.
The document or LPA for short, legally enables your Attorneys to make decisions on your behalf if you lose Mental Capacity.
The LPA deals with your Financial, Health and Care decisions while you are alive, Wills deal with your estate after your death.
There are two types, one for Property and Financial and one for Health and Welfare.
Plan for the Future now
Many people wrongly believe that their “ next of kin get the final say”.
The Lord Chancellor, in 2007 when he introduced them, quoted “We all know how important it is to plan for the future. Having a Lasting Power of Attorney (LPA)…in place should be as common and natural as making a Will”.
Only 1% of the adult UK population have an LPA in place despite one third of us, over the age of 65, developing some form of dementia. Every 90 seconds someone is admitted to hospital with some form of brain injury.
There are four reasons to make a Lasting Power of Attorney.
1. Freedom to choose
When capacity is lost with no LPA in place, the only alternative is an application for a Deputyship order with the Court of Protection. With a Deputyship application, anyone over the age of 18 can apply to the Court of Protection to be your Deputy to make Financial decisions on your behalf. If your Deputy is over the age of 18 and have the required financial skills, then deputyship will be granted. These appointed deputies may not necessarily reflect your personal views. Without an LPA in place, you give up your power to choose for yourself, leaving it to the Courts to determine who make critical decisions on your behalf.
Take your power back, do not let a stranger or someone you have not chosen take control over your Financial and Care decisions. In the case of a Property and Financial LPA, you can also specify whether your Attorney can use the LPA now or only when your capacity has gone.
You control how your attorneys act. Without an LPA in place, you put your family and relatives in a difficult situation when they have to sit and watch how your interests are controlled by others.
2. Costs of the Court of Protection to grant permission for a Deputyship order.
The first Court application fee is £385 excluding legal fees, plus the ongoing annual fees payable to the Court of Protection.
Taking into account all of the costs, legal fees and the ongoing supervision charges, having an LPA completed and registered is by far the more cost effective and reasonably priced solution compared to applying for a Deputyship order.
3. Time is not on your side
To register an existing LPA with the OPG takes anywhere between a minimum of 4 weeks and a maximum of 16 weeks. When capacity is lost and there is no LPA in place ready to be used, a Deputyship application would have to be submitted so that at least one deputy is appointed to act. To process a Deputyship application through the Court of Protection can take 6 months or more and this is at a time when you will have already lost capacity and the appointment is desperately needed. A Deputyship application is a more time-consuming undertaking, compared to the shorter time required to create and register an LPA in advance.
LPAs mean you specify preferences you want your Attorneys to be aware of when they deal with your Financial, Property and Healthcare decisions. Your Attorneys are expected to keep in mind your best interests and views when making decisions on your behalf.
Your views are legally binding and your Attorney’s must follow them.
You can grant your Attorneys access to your digital assets, online bank accounts and your Will. You can also use your LPA to make charity donation wishes and any Discretionary Investment Management instructions.
The earlier an LPA is completed and registered the better.
With an LPA document in place, you have peace of mind and full estate planning control.
LPAs allow you to choose Replacement Attorneys and even a professional Attorney (such as a Trust Corporation), in case your primary Attorneys are not qualified or unwilling to act.
When you lose capacity and you have no LPA, nobody can access you bank accounts to pay for expenses such as investments and care home fees. If you hold a joint account they are unable to operate the account until an LPA or Deputyship order is produced to the bank.