What is a Lasting Power of Attorney?
It is a detailed legal document (also known as an LPA) which allows you (known as ‘the Donor’) to appoint someone you know and trust (known as ‘an Attorney’) to make decisions on your behalf should you become unable to do so in the future. A Donor can appoint one or more Attorneys. An Attorney must always act in the best interests of the Donor. This article, concentrates on the Property and Financial Affairs Lasting Power of Attorney.
There are two types of Lasting Powers of Attorney for:
- Property and Financial Affairs
- Health and Welfare
If your Lasting Power of Attorney is for your health and welfare, your Attorney(s) can’t make decisions about your money, pay your bills or organise your pension. If your Lasting Power of Attorney is for your financial decisions, they can’t make decisions about your medical treatment, care or daily routine.
This article, concentrates on the Property and Financial Affairs Lasting Power of Attorney only and why it is such an important document to have in place, to help you and your loved ones, if you lose the ability to make your own decisions in the future or you just need help with managing your affairs.
What decisions can be made by my Attorney(s) on my behalf with a Property and Financial Affairs Lasting Power of Attorney?
Your Attorneys have the power to make the following decisions about your affairs:
- Managing your bank accounts
- Paying your household bills- mortgage, rent and any other utility or household bill
- Claim income and benefits for you
- Making decisions with regards to your home
- Buying or selling property for you
- Managing your investments
- Insuring, maintaining or repairing your property
- And lots more.
Can you control the decision-making power given to an Attorney?
The Lasting Power of Attorney allows you to set out ‘preferences’ you would like your Attorney(s) to be aware of when making decisions for you. Preferences are non-binding wishes that your Attorneys should keep in mind. They will provide them with some guidance to help them make the best decisions for you.
Here’s some examples:
“I would like to donate £100 each year to Cancer Research”
“I would like my Attorneys to consult my doctor if they think I don’t have the mental capacity to make decisions about my house”
You can also set out instructions in your Lasting Power of Attorney. These are legally binding instructions and an Attorney must follow them.
“My attorneys must not make any gifts”
“My attorneys must not sell my home unless, in my doctor’s opinion, I can no longer live independently”
When does a lasting power of attorney come into effect?
You can decide when you want your Attorney(s) to be able to make decisions on your behalf which is either when you have lost the capacity to make your own decisions or alternatively, when you just want some help. Whichever option you choose, the Lasting Power of Attorney cannot be used unless it has been registered with the Office of Public Guardian (OPG). We recommend that you register your lasting power of attorney as soon as it has been made so it’s ready to be used if needed.
What is the cost to register a Lasting Power of Attorney?
A registration fee is payable to the OPG when the Lasting Power of Attorney is submitted to them. The current cost is £82 per Lasting Power of Attorney. If you receive benefits or are on a low income, you may be eligible for a whole or part fee remission meaning that you could pay a reduced fee or no fee at all to register your Lasting Power of Attorney.
How long does it take to register a Lasting Power of Attorney?
Registering a Lasting Power of Attorney with the OPG can take several months. Currently the OPG are really busy and it’s taking up to 20 weeks to register Lasting Powers of Attorney so it’s important to make them and get them registered as soon as possible.
What are the consequences of not having a Property and Financial Affairs Lasting Power of Attorney?
It is a common misconception that a Property and Financial Affairs Lasting Power of Attorney is only needed for those that are of an older age. The reality is that you could lose the ability to make decisions for yourself or manage your personal and business financial and property affairs at any time in life. Mental capacity could be lost in an instant due to a serious accident or stroke or maybe over a period of time due to a degenerative condition such as Alzheimer’s.
If you lose mental capacity and there is no Property and Financial Lasting Power of Attorney in place, your family and friends will not have automatic authority to make decisions on your behalf with regards to your finances. Instead, others could make decisions for you and the decisions made by them, may not be what you would have wanted. This can cause disagreements between family members, friends and professionals about what is best for your personal and business affairs at a time that is already undoubtedly stressful.
Some things to consider about your personal affairs:-
- Joint bank account – the bank has the ability to remove access and freeze the account without a Lasting Power of Attorney, even if you have your money in the account
- Bills cannot be paid unless a kind family member or friend pays them on your behalf – but they will not be able to compensate themselves
- Your bank accounts cannot be accessed or managed
- Benefits cannot be claimed on your behalf
- Your home cannot be sold if you need to move into a residential care home
- Your mortgage deal may expire and you won’t be able to re-mortgage your property
- And lots more.
And for your business interests:-
- Business decisions- no one to make the day- to- day decisions or manage the business. Could the business carry on trading?
- Business accounts may be frozen and/or the overdraft recalled.
- Bills go unpaid, suppliers stop supplying, orders cannot be fulfilled.
- Your family could suffer financial hardship
- And lots more.
Is there a way for someone to make decisions on my behalf after I have lost capacity if I do not have a Property and Financial Affairs Lasting Power of Attorney?
A lasting power of attorney can only be made whilst a person has the mental capacity to make it. If capacity is lost and there is no Lasting Power of Attorney in place, a friend or family member can apply to the Court of Protection to be your Deputy and ask for permission to make decisions on your behalf.
Deputyship is granted by the Court of Protection under certain circumstances. It can never be certain that the Court of Protection will approve an application. It can be a lengthy process, cost more than making a Lasting Power of Attorney and registering it and will incur ongoing costs which a Lasting Power of Attorney would not. It’s far cheaper and more effective to make your Lasting Power of Attorney now, just in case you need it and before it’s too late.
We’d love to help you. For further details and more information please call Fiona on 07799 213 721 or email email@example.com.