Lasting Power of Attorney is a legal failsafe for people who can no longer fend for themselves, and deputyship is a less desirable fallback.
Appointing someone you trust, usually a family member or friend, as an attorney to take control of your affairs if you fall ill is a relatively straightforward business. People often do it at the same time as they draw up a will.
Without an LPA, families can find themselves locked out of an ailing loved one’s finances and forced to apply for deputyship. This involves a complicated court process and fees running into many thousands of pounds.
While many consider LPAs to be something mainly needed by the elderly, not having something in place can cause even greater problems for young families. Anyone with dependents should sort out lasting power of attorney, just in case.
Guarding against catastrophe: It’s best to sort out an LPA when you are still mentally able
What is lasting power of attorney?
There are two types of LPA, covering money and health, and you can get one or both if you are 18 or over and have the mental capacity to do so.
The LPAs allow one or more people you trust to take over control of your affairs if you are no longer able to make financial or medical decisions for yourself.
Taking the step of registering an LPA does not mean it automatically comes into effect. That will only happen if and when you lose capacity to act on your own behalf.
If you still have some but not full capacity, attorneys are expected to consult you and in such circumstances you can still take the lead whenever you feel able.
Under any scenario, your attorneys must always act in your interests not their own.
A property and financial affairs LPA allows your attorneys to do anything from paying household bills to managing investments to selling your home – if for example that becomes necessary to cover care home bills.
Health LPAs give attorneys the ability to make decisions about your medical care, including your treatment and whether you need residential care.
You can appoint a lawyer as an attorney but of course they will charge for their services and bills might rack up if you are ill for a long time or have complicated affairs.
Solicitors for the Elderly points out that having an accident or becoming seriously ill could happen at any stage of your life.
‘Everyday tasks involving managing your accounts, paying your bills and maintaining your property would become very difficult, if not impossible,’ it says.
‘In the LPA, you appoint one or more “attorneys” who will be able to make decisions on your behalf. An attorney is anyone you choose and trust. He or she must consider your best interests when making a decision on your behalf.
‘It is also important to discuss all these matters with family and friends, particularly those who you choose to appoint as your attorneys, whilst you are able to so that your attorneys are well aware of your wishes in the event that you do lose capacity.’
The STEP body of inheritance professionals says: ‘A qualified adviser can help prepare an LPA for you, which can ensure you have considered all aspects and prevent problems later on, especially if you’re unsure of the process or you have complex affairs.
‘When making an LPA your choice of attorney is very important. You should not underestimate the responsibility bestowed upon the person acting as attorney.
‘Careful consideration and diligent planning are needed to help ensure that they are the right person for the job, have your best interests at heart and will respect the values you hold, if and when you lose the capacity to make decisions.’
The LPA system replaced ‘enduring powers of attorney’, which were made up until 1 October 2007. If someone has an old EPA they can still be used for property and financial affairs, but an LPA will need to be made to cover health and welfare.
> Gov.uk info on Property & Financial Affairs and Health & Welfare LPAs
How do you make an LPA
The LPA system is run by the Office of the Public Guardian, which also handles complaints if anything goes wrong.
You must fill in and submit forms, and pay a fee of £82 per LPA. It then takes up to 20 weeks for them to be registered, and after that there is nothing more to do unless they need to be put into effect.
Specialist LPA services or lawyers will help you with all this, and many people prefer to get professional assistance to ensure they are set up properly and will work in line with your wishes.
For example, a lawyer can help you decide if you need more than one attorney, and if you do whether they should have to agree on all decisions jointly or can choose to make decisions independently where that is more practical.
Costs vary greatly, especially among solicitor firms, but you can expect to pay £300-400 for help with one LPA, with deals available if you want to get both at once or a couple are setting them up together. However, the bill can be bigger if you have complicated affairs.
You can cancel power of attorney, or decide to appoint different attorneys if you wish.
If someone is unhappy about the way an attorney is conducting a person’s affairs, the OPG can carry out an independent investigation into their LPA complaint.
What is deputyship?
If you do not set up an LPA, your family can face a costly court ordeal to take control of your funds if necessary.
Deputies are also subject to ongoing oversight by the OPG, because they were not personally chosen by the person whose affairs they look after.
If you apply to be a deputy, the Court of Protection will decide whether you are suitable or not.
Solicitors for the Elderly says: ‘Although the Court endeavours to appoint somebody who would act in your best interests, you could potentially have somebody managing your affairs who you would not have chosen had you had capacity.
‘It could even be someone you don’t know and not necessarily a family member.
‘Furthermore, an application to the Court is very time consuming and costly. It may be months before somebody is able to access your finances.
‘This can be a very stressful time for your friends/relatives who may end up spending their own money trying to pay your bills whilst waiting for a court order.’
STEP says: ‘Deputies are supervised by the Office of the Public Guardian and must write a report every year explaining the decisions they have made as deputy.
‘This is important to understand as it can be quite a lot to take on.’
How do you apply for deputyship if there is no LPA?
If a friend or family member loses mental capacity and has no LPA in place, you can apply to the Court of Protection to become their deputy.
If there is no friend or family member who is willing or suitable the court can appoint a professional.
The process can take six months and involves getting assessments done, filling in forms and paying for a ‘surety bond’ – a form of insurance in case a deputy proves unreliable.
The court will set out what decisions a deputy can make and you have to stick only to those which are authorised.
Costs include £371 per deputyship application – property and finances and personal welfare are separate as with LPAs – a £100 assessment fee for new deputies, £494 if the court wants a hearing, and annual supervision fees of £35-£320.
It is also advisable to get a lawyer’s help. SFE warns: ‘When considering applying to become a deputy, seek professional legal advice to ensure the correct authority needed by the deputy is applied for, such as authority to sell a property as this may not be granted automatically.’
> Gov.uk info on applying to be a deputy
This post first appeared on Dailymail.co.uk
