Think about this for a moment: who would you trust more – a total stranger or your family?
If you’ve answered your family, it’s time you thought seriously about a Lasting Power of Attorney (LPA). Because it could be the best decision you’ll ever make.
Sounds complicated. What is it?
Put simply, it’s an insurance policy, just like other insurances you have. When you pass your driving test, by law you must insure that sky blue Ford Fiesta. So if you have an accident, the car is replaced, or if you damage someone else’s motor, their car is replaced, meaning there is no financial cost to you. And it’s easy, because the insurance company deals with it.
The same applies when you buy a house. If you’ve got a mortgage, you take life insurance out so that if you die, your partner can stay in the property because the mortgage has been paid off.
Got buildings and contents insurance? Again, if your house fell off the hill, this insurance will help to rebuild it. So we’re protected in everything that we’ve got.
However, the problem with all this is that these insurances only protect the material fact that we own these belongings. There is a void in protection.
A void? Why?
We’re growing older as a society, and more people are going into care. Many people end up with dementia, such as Alzheimer’s disease or Parkinson’s disease. More of us are suffering heart attacks and strokes. But with all these tragedies, people don’t actually die from them.
So if something happens to you, such as Alzheimer’s – and you don’t die – you need protection in place to ensure that your loved ones, your family, can look after your interests if you’re unable to.
Yes, just like all those other good insurances you have that protect your other assets.
Understanding a Lasting Power of Attorney
Picture this. You’ve gone through life protecting all your assets. You made a Will because it’s the sensible thing to do when you die.
That Will is your insurance policy to ensure all your assets you’ve built up in your lifetime go to the people you want them to go to.
However, if you have an accident, and you don’t die, you need to ensure you’ve got a Lasting Power of Attorney that covers two areas: property and financial affairs and health and welfare. Because it does what it says on the tin.
If you want your family and your loved ones to control your property, finance, health and welfare when you lose capacity, then Lasting Power of Attorney gives them the legal right to act on your behalf.
Many people are unware that if you haven’t got a Lasting Power of Attorney in place to ensure your family looks after your property, finances, health and welfare, then the local authority will.
Under the Court of Protection, they will produce a court order to protect you as a vulnerable person and control your assets. They will control your property, finances, health and welfare. More about them later.
Applying for a Lasting Power of Attorney
There are two processes – applying and registering. First, you’ll fill out the document and name who you want to act on your behalf. By appointing these people in your application, it means once they’re registered (the second part), they can act on your behalf if you lose capacity under the Mental Capacity Act 2005.
What is the Mental Capacity Act 2005?
There are five principles of the act, which are:
1. Every adult has the right to make his or her own decisions and must be assumed to have capacity to do so unless it is proved otherwise.
2. People must be supported as much as possible to make their own decisions before anyone concludes that they cannot do so.
3. People have the right to make what others might regard as unwise or eccentric decisions.
4. Anything done for or on behalf of a person who lacks mental capacity must be done in their best interests.
5. Anything done for, or on behalf of, people without capacity should be the least restrictive of their basic rights and freedoms.
If necessary, the Power of Attorney means your family will be able to deal with your bank accounts; they can sell your property, deal with your health issues and where you go into care (if you have to go into a care home).
They can also advise the hospital what your wishes would be with regards to life sustaining treatment.
What’s the most valuable thing that a husband and wife have?
Tricky question? Not really. It’s themselves.
They are living human beings that have created all that wealth. They are living, breathing human beings who, as husband and wife, have produced their family. And the family are possibly married with children too.
In a lifetime you could pay anything up to £70,000 in insurance premiums to protect your assets. You’ve insured all the material things you have, but not the insurance to protect yourself.
How would you feel if you were married, living your life, and then you get into your 60s, 70s, 80s and suddenly your partner goes to the doctors and he or she is diagnosed with dementia. Or perhaps you went out for a meal with your mates, had a car accident and lost capacity under the Mental Capacity Act.
If, under the Mental Capacity Act, you are deemed a vulnerable person, you’ll be in a position where the local authority takes control of your interest in your property and the finances of the family home.
You won’t be able to control what they do with you, or what happens if your partner was hospitalised, for example. A frightening thought.
The local authority’s role
They listen, naturally. But they have the legal right, under the Court of Protection, to do what they think is best for that vulnerable person. Because the local authority will ask why a Power of Attorney isn’t in place already.
If it’s not in place, the local authority’s duty of care under the Mental Capacity Act is to protect that vulnerable person. By law, that vulnerable person has to be protected.
However, with Power of Attorney in place, the local authority will say, ‘yes, you have the power’.
Let’s be clear though – they’re not villains in all of this. If you went back 20 years ago, there were five people in social services dealing with the care needs of people.
Now, fast forward to the present day amid austerity and cutbacks, there might be just one person doing the same work of those five people.
So as someone is brought to their attention under the Mental Capacity Act 2005, the local authority has a duty of care and a procedure they have to follow. That’s their job – they will tick all the boxes.
Imagine this scenario
Your partner breaks her leg and is bed-bound. You haven’t got Power of Attorney in place but you need to get some money out of their bank account.
You go to the bank to ask for the money, explaining that you’re their better half. Betty the bank manager will ask, ‘Have you got Power of Attorney in place?’ You’ll say, ‘Err, no’.
They won’t want to know.
But if you go to the bank with a registered Lasting Power of Attorney in place, they’ll say, ‘How can we help you?’ See the difference? They’ll change the bank account to your name – attorney over your partner. The value of having this document in place is clear to see.
Getting the ball rolling
When we come to register a Power of Attorney, clients have to pay a fee to the Office of the Public Guardian. At the moment it’s £82 per document.
Once the document is registered, the Attorney acts on the vulnerable person’s behalf, if the insurance is needed.
To put Power of Attorney in place will cost you hundreds of pounds – but not thousands. It’s a one-off fee that covers them for the rest of their lives. You can’t put a price on peace of mind.
So when should I do this?
Put bluntly, straight away – if you’re in your 30s, 40s, 50s – as soon as you realise the value and need for Power of Attorney.
But so often we hear people say, ‘Ah, I’m only in my 40s, I’ll be fine’. Yes, you could be. But you could also have a car accident when you’re 20 years old. You could get a debilitating condition that would deem you, under the Court of Protection rules, as a vulnerable person. No one knows what’s around the corner.
What if the worst does happen?
Imagine not having buildings insurance in place if your house fell off the hill. It would be absolute chaos.
So imagine not having Lasting Power of Attorney in place. Next, something happens to your wife or husband and the local authority says, ‘Right, we’re going to put your partner in a care home in the next town’.
You argue till the cows come home but they simply say, ‘Sorry, you haven’t got Power of Attorney and that’s the only bed we have available’. Your partner goes to that care home and hasn’t got a clue what’s going on.
Perhaps your partner has dementia. You care for them at home, but don’t have Power of Attorney in place.
You’ve kept them at home for as long as possible, but the local authority intervenes and says, ‘Sorry, he’s got to go into care’. And that care is over 30 miles away.
If this happened, and you don’t drive, how would you visit them? Whether you are state-paying or privately funding care, if you haven’t got Power of Attorney in place, the local authority will place your loved one in a care home of their choice – not yours.
If this happens, what are my options?
In a situation like this, we would advise you to make an application to the Court of Protection.
But it’s very costly – the fees can be between £2,000 to £3,000 including court costs and lawyers fees. And the process can take up to nine months. In that nine-month period, the local authority will continue acting on behalf of the vulnerable person.
In our years of experience doing Power of Attorney, the Court of Protection will not give authority for a deputyship order to be granted for the health and welfare of the individual. They’ll deem that the health and welfare of the client has been dealt with.
However, if there is a dispute between the family and the local authority over the care that vulnerable person is receiving, we have seen an order made from the Court of Protection so the family is given that deputyship order.
But the general rule is that the only deputyship order you can get is one for property and financial affairs. And there are restrictions.
Imagine, nine months later, you’ve got that deputyship order. Every year you have to renew the licence. The fee at the moment is between £400 to £500.
But you must renew it to demonstrate to the court that you are acting in the best interest of that vulnerable person.
There’s a restriction on how much you can spend, too – up to £500 without involving the local authority again. Plus, if you wanted to sell the property, you’d have to get permission to do so.
If you’ve been together for years, it’s natural to believe that if anything happens to you or your other half, you’ll be the one to look after them. You make decisions together as you care for each other. That’s natural.
But all of a sudden, you lose control of that. You’ve got a total stranger dealing with your affairs.
Our message to our clients is don’t go through that living hell. Put your Lasting Power of Attorney in place now.
You’ll sleep easier tonight.