1. No One Including Your Spouse/Family Member Can Legally Look After Your Welfare And Your Finances
No one is legally able to look after you if you are incapacitated, not even your spouse or family member without either a registered Lasting Power of Attorney (LPA) or an agreement with a Government body called the Court of Protection (CoP)
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All Bank Accounts In Your Name, Including Those In Joint Accounts Names Are Frozen
If you become incapacitated, without an LPA all financial accounts registered in your name, including those in joint names are frozen – yes frozen! To get authority to unlock these can take between six to nine months during which time your mortgage is not being paid putting your home at risk and unpaid insurance premiums mean your policies will lapse. If they were taken out to repay your mortgage or pay a potential Inheritance Tax liability, you will have to take out new policies at higher premiums
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Social Services Will Be Involved In Deciding Your Care
Social Services could make decisions about where your live and the care you require. This means you may be put in the first available care home where there is a vacancy and this may not be near to your family nor be of the quality you would wish
Even if your family have the money to move you to a more convenient location or a home of better quality, they would not have any right to ensure this happened
You could even be resuscitated against your wishes unless you have a DNR (Do Not Resuscitate) order in place
- Drawdown On Equity Release Plans Can Fail
Drawdown lifetime mortgages (Equity Release) allow you to take an initial lump sum, followed by access to a cash reserve facility for extra funds whenever required.
Equity Release draw down plans require the clients to have mental capacity to enact a drawdown otherwise the facility is lost. You could be in a position where you cannot access any further funds you were relying on
- Appointing Someone To Look After Your Affairs If You Do Not Have an LPA is Time Consuming, Controlling and Expensive
Without a Lasting Power of Attorney (LPA), the only way to look after the affairs of someone who has lost the ability to make their own decisions, whether through mental illness or a physical disability, is to apply to the Court of Protection (CoP) to act as their deputy.
This process is both time consuming, expensive, frustrating and controlling. It can take over 9 months to set up and cost several thousands of pounds to set up. Each year while you are alive you will need to pay a supervisson fee of several hundred pounds.
As a Deputy you will never be given the power to make decisions about life-sustaining treatment.
Apart from being told by the Court of Protection what you can and can’t do, and all the costs involved, every year you also have to prepare accounts and a 34 page report documenting everything you have done and you also need to keep copies of all receipts and statements.
It’s no wonder when a deputy loses someone they have taken care of for many years they mourn their loss, but breathe a sigh of relief of losing the shackles of the Court of Protection.
Convincing as these reasons are, the lack of publicity about LPAs leaves many in the dark about their importance as Roger Bourdon of Enfield Wills is only too aware. “I have sadly come across several situations where families are desperate to look after their loved ones and have had to shell out thousands of pounds to be given that authority. What’s worse is that have had to wait months for the authority to be granted leaving them financially vulnerable in the meantime”
While a Will looks after your affairs on death, an LPA takes care of your affairs and your welfare while you are alive, so in reality an LPA is just as important, if not more so than a Will. Most people have no idea that no one, not even your spouse, is legally able to look after you when you have lost mental capacity and do not have a registered LPA in place.
To appoint people to look after your affairs when you have lost mental capacity and do not have an LPA in place is possible, but it can take around nine months to put it in place and will cost several thousand pounds upfront. You will also be paying supervision fees to the CoP each and every year running into hundreds of pounds. What’s even worse than that is that for the rest of your life you are shackled to the rules laid down by the CoP of what you can and can’t do. You never get free from the control of the CoP whilst you are alive.
By now I am sure you are giving serious consideration to writing your LPAs if you haven’t already.
Yes, with an LPA you are giving someone else the full responsibility of looking after your finances and your welfare and it often worries people that they are losing control at this point, but it doesn’t have to be the case.
There are two LPAs, one covering Property and Finance and the other covering Health and Welfare. In each LPA you can include Instructions and Preferences, which set out the finer details of how your Attorneys are to act. Instructions are directions that the attorneys must follow when making decisions on your behalf, while preferences are what you’d like your Attorneys to think about when they make those decisions for you. Preferences are not legally binding in the way Instructions are, as they just provide guidance and considerations for the Attorneys to follow
It is important to say at the outset that you do not have to include any Instructions or Preferences at all, but you can include as many as you wish that are important to you.
When writing Instructions use words such as “must” “shall” or “have to” whilst for preferences use terms such as “prefer” and “would like”.
It can be hard to come up with Instructions and Preferences when starting from scratch, so here are some examples to get your creative juices flowing.
Please remember this is NOT a definitive list and indeed there is no such list. The idea here is to give you typical examples that you can modify as much as you wish as well as adding others of your own not shown here.
Examples of Preferences
Health and Welfare LPA
“I prefer to live within five miles of my sister.”
“I’d like to be prescribed generic medicines where they are available.”
“I would like to take exercise at least three times a week whenever I am physically able to do so.”
“Whether or not I am mobile, I would like to spend time outdoors at least once a day.”
“I’d like my pets to live with me for as long as possible – if I go into a care home, I’d like to take them with me.”
“I’d like to have regular haircuts, manicures and pedicures.”
Property and Financial Affairs LPA
“I would like to reinvest all interest from each year’s investments into next year’s ISA allowance.”
“I would like to maintain a minimum balance of £1,000 in my current account.”
“I prefer to invest in ethical funds.”
“I’d like my attorneys to consult my doctor if they think I don’t have the mental capacity to make decisions about my house.”
“I would like to donate £100 each year to Age UK.”
Examples of Instructions
Health and welfare LPA
“My attorneys must not decide I am to move into residential care unless, in my doctor’s opinion, I can no longer live independently.”
“My attorneys must not consent to any medical treatment involving blood products, as this is against my religion.”
“My attorneys must ensure I am given only vegetarian food.”
Property and financial affairs LPA
“My attorneys must consult a financial adviser before making investments over £10,000.”
“My attorneys must not sell my home unless, in my doctor’s opinion, I can no longer live independently.”
“My attorneys must not make any gifts.”
“My attorneys must continue to donate to charities that I have supported or for which I have set up standing order or direct debit payments.”
“My attorneys must send annual accounts to my brothers and sisters.”
“My attorneys must instruct a tax accountant to prepare my annual tax return.”
“This lasting power of attorney only applies if a doctor confirms in writing that I don’t have the capacity to make decisions about my finances.”
For more information about Lasting Powers of Attorney please contact Roger Bourdon on 07958 221460 or email [email protected]
Visit our website www.enfieldwills.com
To read Roger’s article “Can your will be contested” please click here