Having a LPA in Place Should be Common and Natural

The Alzheimer’s Society reports that more than one million people in the UK will have dementia by 2025. Accidents, strokes, brain injuries and Parkinson’s Disease can also affect your ability to make your own decisions. Handling financial affairs can become virtually impossible and could cost a great deal of money and load the burden on relatives.

A report from ‘This is Money’ on analysis by Key Retirement Solutions found that more than 11,500 families every year are having to go to court to appoint ‘deputies’ so relatives and friends can make decision on behalf of ill or incapacitated people.

lpaWithout a lasting power of attorney** (LPA) in place, it can be difficult to access bank accounts.

For example, a 2013 British Bank Association Booklet, “Guidance for People Wanting to Manage a Bank Account for Someone Else”, said: “If one joint account holder loses mental capacity, banks and building societies can decide whether or not to temporarily restrict the use of the account to essential transactions only.”

We have all warned how the restricting of a joint account has severe implications as the joint owner cannot freely withdraw what is their own money without an order from the Court of Protection which could be devastating, especially if this is their only form of income, such as their pension, paid into this joint account.

Having a LPA in place should be as common and natural as making a will.

The UK authorities introduced LPAs in October 2007, replacing the previous system of enduring powers of attorney (EPA) – although an enduring power of attorney created before October 2007 remains valid.

The Treasury advises consumers: “If you want to give one or more people the power to completely manage your money and property if you lose mental capacity – that is, if you can’t make decisions for yourself – you have to set up a permanent power of attorney.

The people who will manage your finances are called your without the other (good for spreading the load).

You should also choose at least one replacement attorney who would take over if their attorney died or could no longer act for them. If they are older and the people they choose are all the same age as they are, they may not end up being the best people to act if and when their help is needed.

Setting up a power of attorney is a big step and you need to understand all the implications and may want to get good legal advice.

The person setting up a power of attorney must have the capacity to make their own decisions.

It is a good idea to get it set up well before you need it. It is much harder and more expensive for someone to help you with you money and property if you have already lost mental capacity. And if you get it set up now, it is there if something happens to you suddenly, like an accident or a stroke.

Setting it up does not mean you have to give up control.

It takes several weeks to register a lasting power of attorney – yet another reason to get it set up early. If you lost mental capacity during those weeks, your attorney would not be able to act for you in the meantime.

The attorney you choose should be someone you really trust and preferably younger than you. Many people choose their husband, wife, partner, another family member or a close friend.  You might choose more than one attorney.

If you do, they can decide whether they need to make decisions jointly (a good idea if they want two opinions on their finances) or whether each can decide things.

 

SEE this BBC item
Can Power of Attorney help protect your family against scams?
If an elderly relative starts to spend money irrationally, or in a way that is out of character, what powers do you have to intervene and stop them? Louise Minchin has heard from one woman who was worried about her father’s spending and when she eventually gained Power of Attorney over his affairs, discovered that more than £10,000 had disappeared from his bank account. We investigate what people can do if they feel their relative is becoming vulnerable to scams.   bbc.co.uk/programmes/p04c0yl6

 

** Lasting power of attorney in England; known by other names in other UK domains

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