According to the Alzheimer’s Society, there are 850,000 people with dementia in the UK, with numbers set to rise to over 1 million by 2025, reaching 2 million by 2051. 1
Every two seconds, someone in the world will have a stroke 2.
There are more than 100,000 strokes suffered by people in the UK each year – that’s around one stroke every five minutes. There are currently over 1.2 million stroke survivors living in the UK.
Have you ever thought about how your affairs would be managed should there come a time when you could no longer manage your affairs?
A change of circumstances in your life; physical or mental, now or in the future, and no matter what your age, could result in you needing assistance with the management of your affairs. You could require assistance with your property and finances, your health and personal care, or both.
Ensuring a smooth path when circumstances change can be assisted by having a Lasting Power of Attorney (“LPA”) in place. You could avoid future worries for your family and friends, by planning ahead and making an LPA now. By doing so, you could safeguard against you having no choice in respect of who manages your affairs.
What is an LPA? How does it work and how much does it cost?
An LPA is a document by which you can appoint someone you trust (an individual such as a family member, or a professional, such as your accountant or solicitor) to manage your affairs. The Lasting nature of the document, means that your attorneys can continue to manage your affairs, even if you are not longer able to do so.
There are two types of LPA which you can make;
- One covering your Health and Welfare (appointing someone you choose to deal with your health matters),
- The other covering your Property and Affairs (allowing someone you choose to deal with your property and other assets, for example bank accounts).
You can choose to make only one, or both types of LPA. The Health and Welfare LPA can only be used by your attorney(s) if you lose mental capacity.
Your LPA(s) must be registered with the Office of the Public Guardian (OPG), before they can be used by your attorneys. To register the LPA, the OPG charge £82 per document. If you are in receipt of certain benefits, or your gross annual income is below £12,000, you can apply for exemption or remission of this fee. The costs of the preparation of your LPA(s) will depend on your circumstances and how many LPAs you wish to make. Please contact our Private Client team for specific details of our charges.
Common Misconceptions and Frequently Asked Questions (FAQs):
1. “An LPA is for when I am older, I don’t need an LPA yet, I can do it later.”
This is a common misunderstanding.
First of all, a person needs mental capacity to give instructions to make an LPA. If you leave it too long you may not have capacity to make the document(s). If this happens, an application would have to be made for a Deputyship Order from the court, which would then determine how your affairs are managed. An application for a Deputyship Order would normally mean payment of a court fee, together with solicitor’s fees for making the application and ongoing court supervision fees, all of which would prove more costly than making a LPA. The Deputyship Application process can also be time consuming and distressing, as well as causing delay. Making an LPA allows you to choose who to appoint to deal with your affairs, and gives you more control as to what they can and can’t do.
Another benefit to having made an LPA is that, should you require residential care and no longer have the capacity to deal with your finances, your attorney(s) would be able to contact your bank, register the LPA, and pay your care fees immediately, rather than having to wait for a Deputyship Order.
2. “I have a joint account, I can access that money without needing an LPA”
Each bank will have their own requirements as to how and when parties to an account can access funds. Every bank should follow the banking protocol guidance relating to this, however, this is not always straightforward. If you hold a joint account with someone, problems may occur if you do not have a LPA and one account holder loses mental capacity. A bank may not allow a joint account holder to continue operating an account, unless there is a LPA in place for the person who has lost capacity. This may mean that neither account holder can access the account.
3. “How do I know that my wishes will be carried out?”
When you make your LPA, you can include restrictions or conditions in the LPA which your attorney(s) must follow, and you can provide guidance within your LPA.
The LPA also contains provision for you to choose a professional or friend to confirm, amongst other things, that you understand the purpose of the LPA and the scope of powers you are giving to your attorneys. Attorneys are under a duty to keep accounts and records of their actions, and are accountable. This duty is outlined in the Code of Practice to the Mental Capacity Act 2005 which details the duties of attorneys.
W Davies also offers a service whereby you can specify the point at which your original LPA is released to your attorney. We will place your signed consent form with your LPA, and will only release the document in line with your wishes.
4. “I don’t have any family, so do not know who to appoint.”
As well as having the choice to be able to appoint either a family member or a friend, you can also choose to appoint a professional. You will need to be aware that a professional would charge for so acting. W Davies’ directors can act as your attorneys. Having a professional as an attorney will provide an independence and added security for you.
5. “I have an Enduring Power of Attorney, I do not need an LPA”
Enduring Powers of Attorney pre-date the new LPAs. They are still valid but you cannot make a new EPA now. If you lose capacity, an Enduring Power of Attorney has to be registered before it can be effective. With an LPA, we advise that this should be registered immediately and then the document stored safely. It should not be released unless in line with your wishes.
If you need to be taken into care, having lost capacity, you might require immediate access to funds for the payment of care fees. If you only had an EPA, your attorneys would have to wait for the EPA registration before they could access your bank account. This can cause weeks, if not months of delay. Additionally, an EPA will only cover your property and finances and does not cover health related matters. You may wish to consider making a Health and Welfare LPA, in any event.
How can W Davies help?
W Davies can offer specific advice tailored to your personal situation, whether you own a business or other assets.
We can help with who to appoint as your attorneys and how to appoint your attorneys in relation to the assets you own, and how they are held.
Please feel free to contact a member of the Private client team who will be pleased to advise you on any aspect of Lasting Powers of Attorney.
Get in touch / Find out more
Please contact Lisa Fay at firstname.lastname@example.org of or 01483 744900 for advice.
Find out more about our Probate & Estates services here.