It’s been a while since I wrote anything related to Practical Matters within Age Life Balance. Over the next weeks I’ll be publishing several blog posts on the topic of Estate Management. I’m certainly no expert in this field but I’ve been very interested to learn more about it. My blogs have been inspired by the charismatic Julian Bright from Bright Insight Ltd, a firm of estate planners.
Today’s article is on Powers of Attorney, but Funeral Planning and Wills will follow in due course!
My question for you is, can you afford not to read and take action?
Lasting Power of Attorney
This post is ultimately concerned with what happens to people before they die, while they’re still alive.
The industry guidelines would suggest if clients only have a limited budget available, then Lasting Power of Attorney (LPA) should take priority over anything else.
Why would you need a Lasting Power of Attorney?
Without a valid LPA in place, no-one else can make decisions or act on your behalf, even if it’s a matter of common sense or the right thing to do. Once an LPA has been arranged, it can be enacted either permanently or temporarily depending on the situation.
Julian told me that recently an elderly client of his, who was generally in good health, suffered a mini stroke. For about 12 weeks her daughter (her nominated attorney) assumed responsibility for all important decisions and actions. Having regained full health, the client once again was able to continue living and acting with total independence. That interim period however was invaluable in removing any stress and aided full recovery with peace of mind.
LPAs are typically required in cases of ill health or accidents, where the person concerned becomes physically or mentally incapacitated. Neither situation can be ‘planned for’ nor can they be anticipated or predicted with any certainty. Hopefully an LPA may never be required in practice, but you won’t need one, until you need one. And by that time, it could be too late!
Industry experts suggest that they are an essential component of life and financial planning for all adults, whatever their age.
Ultimately, if an LPA isn’t in place, nothing can be done. Even the fact that you have a spouse, isn’t enough – legal paperwork is still required!
Regardless of whether you’re married or you’ve been together for a long time, anything held in individual names e.g. bank accounts, mortgages even phone bills, the other party does not have access or decision-making authority. Some financial institutions are even starting to require the assurance of an LPA to support applications for joint accounts.
What if you don’t have one?
Without an LPA, you may need to apply to court for a deputyship. Courts can then appoint a deputy to deal with transactions on your behalf. This could cost up to £6-8K and take 9-12 months to arrange. In the meantime, bills may still be accruing etc. and nothing can be done. There is a possibility that the courts may not appoint a deputy from the family. In some cases they may even appoint a solicitor to act. This would certainly incur additional ongoing costs and loss of control by the family and loved ones.
In contrast an LPA can be drawn up for individuals or couples for a couple of hundred pounds.
Different types of LPA
An LPA is a legal document that lets you (the ‘donor’) appoint one or more people (known as ‘attorneys’) to help you make decisions or to make decisions on your behalf.*
There are 2 types of LPA:
- Health and welfare – dealing with medical professionals, health authorities, local authorities and care givers.
- Property and financial affairs– dealing with financial assets, property, banks, utilities, pension, HMRC etc.
It’s possible to have one without the other, but makes most sense to sort both at the same time.
Who can arrange an LPA?
Arranging an LPA is the responsibility of the individual concerned and can be put in place at any age. No one else can arrange one on their behalf or yours, and of course can only be done while you still have mental capacity.
They can be arranged by a solicitor or an estate planner. These can then arrange for them to be registered with the Office of the Public Guardian and them to be appropriately stored for future access, if and when required.
You could also arrange your own LPA on line. However, unless you are knowledgeable about such things, this could take up unnecessary time and end up more costly in the long-run, especially if you don’t get it right.
Do I have one?
I don’t yet, but I am in the process of arranging one. My husband and I will get them drawn up together, to cover both the financial and health and well-being aspects.
Hopefully we’ll never need one, but surely, it’s best to put them in place well before we may ever need to use them. And this can remove unnecessary stress and emotion from what could already be a very stressful situation.
Like us, you may wish to arrange a consultation with a professional, like Julian Bright, who can guide you through all the options, the pitfalls, and the important considerations for you, your family and loved ones.
If you don’t already have a Lasting Power of Attorney in place today, it’s certainly time to give it some thought. Without a valid LPA in place, no-one else can make decisions or act on your behalf, even if it’s a matter of common sense or the right thing to do. Once an LPA has been arranged, it can be enacted either permanently or temporarily depending on the situation.
They can be quick and relatively cheap to arrange. It’s rather a case of can you afford not to?
*definition from gov.uk – office of the public guardian.
Thank you for reading! For more on Age Life Balance, browse the blog at www.agelifebalance.com to find out more.