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It is a sobering prospect to consider that at some point in the future, we may not have the sharp mind and rational thinking that we do now. However strong we feel, there still remains the chance that any one of us could develop an illness or injury which could affect our rational judgement and, as a result, our ability to make decisions about our well-being and finances.

It is estimated in the UK only 40% of the adult population has a will, while less than 1% has a plan in place for when they can no longer make decisions for themselves i.e. a Lasting Power of Attorney (LPA).

 

What if I don’t make a Lasting Power of Attorney?

As it stands, no person – not even a spouse or family member – can gain access to cash, investments or property which is in your sole name, and quite rightly so. However, if circumstances changed and you were no longer able to make decisions for yourself and you had not already legally given permission for someone to access these assets, the following actions would be taken:

  • Your bank accounts will be frozen
  • Your business assets could potentially come to a standstill.

This could result in untold expense and stress to your family at a time when emotions are already running high.

Without an LPA in place, the only option would be for someone to make an application to the Court of Protection on your behalf. This process takes time (roughly between 6 – 12 months) and comes at a cost – roughly £2,500.00.

Following this application, it is for the court to decide whether to appoint the person making the application to act for you (as your deputy). Note: this may not be the person you would have chosen if you had already made an LPA.

Furthermore, if the court does not deem the person making the application as ‘appropriate’, they may appoint a different person, such as a professional, who will charge to manage your finances and will not know you, your family or how you would have chosen to run your affairs.

 

What is a Lasting Power of Attorney and why should I make one?

To avoid these circumstances, and for peace of mind, our advice would be to make a Lasting Power of Attorney while you are able.

An LPA is a legal document which allows you to plan ahead and appoint a trusted relative or friend to make decisions for you when you are no longer able e.g. following an illness or accident.

By personally choosing who you want to make decisions for you, an LPA effectively puts you in control of decisions eventually being made on your behalf.

There are two types of Lasting Power of Attorney:

  1. Concerning your property and finances e.g. operating bank accounts, running business affairs, making investments, selling/buying property
  2. Concerning your health and welfare e.g. determining where you live, what you eat and even how much exercise you can take, as well as covering life sustaining treatment

You are only able to make an LPA when you have capacity to do so; unfortunately, there have been numerous cases when our solicitors have been asked to attend a client’s parents/family members to put in place an LPA but the request has been made too late and, sadly, the person no longer has capacity to understand and so the opportunity is lost.

 

Who should I appoint as my Attorney?

Whomever you appoint as your Attorney will be making decisions on your behalf, so you must trust them completely; you are essentially handing this person the keys to your home, your bank cards and passbooks.

For those with business interests, it is worth considering having two separate financial Lasting Powers of Attorney:

  1. For your personal assets, possibly a family member
  2. Dealing with your business assets and investments, perhaps a business colleague, your financial adviser or accountant – someone experienced in your business, which your family members may not be

These documents must be registered at the Office of the Public Guardian before they can be used. This is the body that monitors your Attorneys and checks all is running smoothly and correctly.

 

Final words

Lasting Powers of Attorney are worth their weight in gold. Liken them to buildings insurance; presumably you have buildings insurance on your home and any business premises you own and wouldn’t think twice about putting it in place even if you never need to make a claim – LPAs should be the same. You may never need to put them in to practice but if you do, you have already taken the steps to ensure that your finances and well-being are handled as you want them to be.

Lasting Powers of Attorney are not just for the elderly – accidents and illnesses do not discriminate against age – if you have assets and property in your sole name you should have one in place. None of us are able to see what is around the corner, so make sure that you have plans in place for the unexpected.

In short: get it done! Choose your attorneys, sign the document and then forget about it!

If you would like to make an appointment to discuss Lasting Powers of Attorney contact Victoria Richer, Solicitor in our Wills, Probate and Trusts department on 0191 212 7793 or email vricher@mincoffs.co.uk

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