With an ever aging population Lasting Powers of Attorney (or their predecessors Enduring Powers of Attorney) have become ever more popular with clients in Romford and Havering. We try to explain some of the background to their use and the questions people typically have about putting a Lasting Power of Attorney in place. Planning for issues in our lifetimes are difficult but ever more necessary as we live longer.
What is a Lasting Power of Attorney
In short, a lasting power of attorney ( or LPA ) is a simple way of giving someone the legal power to make decisions on your behalf if you lose lack mental capacity.
Why do you need a Lasting Power of Attorney
People mistakenly believe that family members are able to deal with their affairs when they lose mental capacity.
Unfortunately for many they do not find out that this is not the case until the worst happens and their loved ones are affected to the extend that they can no longer manage their own affairs. Then simple tasks like accessing bank accounts become difficult if not impossible without the consent of the then affected family member.
Major life decisions are also affected – the jointly owned house becomes impossible to sell easily because one of the parties cannot sign the documents and they cannot give instructions to the lawyer dealing with the sale and purchase. This can be even more distressing for the spouse whose whole reason for moving is to provide better suited accommodation for their husband or wife.
In short dealing with a mentally incapacitated persons affairs without a LPA becomes virtually impossible and, of course, at the same time you are also trying to physically care for that person.
The Lasting Power of Attorney is specifically designed to be used to manage those affairs and it recognised by the government, care providers, banks, financial institutions and lawyers. A normal power of attorney would automatically lapse if you lost mental capacity.
Surely there is an alternative to a LPA?
Yes. It is not that the Lasting Power of Attorney is the only way to deal with someone elses’ affairs if they lose mental capacity but a LPA is far more cost effective than applying to the Court of Proection for the Appointment for a “Deputy” to deal with his or her affairs. This is the only real alternative. This is more costly because you need to prepare a more detailed applications to the Court of Protection and it is a lot more time consuming. Typically people only deal with this type of arrangement when they hit a brick wall – money cannot be withdraw to cover care fees or a sale of a property is required to fund those fees or provide suitable alternative accommodation. The added pressure of costly and a relatively slow process is not what your family and friends want to face at that point.
How old should I be before I put in place a Lasting Power of Attorney.
There is no age limit provided you are an adult (over 18). For some younger or disabled people, especially those who have been affected by serious illness (whether mental or physical), there may be benefits in putting this in place for example in favour of your parents if there is a possibility of illness affecting your ability in the future.
Many business people, especially those in small businesses where they are ‘key’ men and women, put in place these arrangements as an important part of their business contingency plans.
If the business revolves around you to sign documents and approve payments/receipts how long could it function without your daily input? We have seen examples of business people being struck down by sudden illness (e.g. heart attacks or brain hemorrhages) which have resulted in long term hospitalisation.
The majority of people who consider these arrangements are of course reaching the end of their working lives or are in retirement. Often the arrangement of a LPA goes hand in hand with your will but they are often arranged at different times.
Why should I make a Lasting Power of Attorney
The statistics indicate that 1 in 5 people over 85 years old already suffer from Alzheimer’s or some other form of dementia – women being significantly more affected than men. Within the next 10 years more than one million people will have dementia.
However it is not pure statistics which motivate clients into making these decisions.
What spurs people into action is usually the friend or relative who has a problem with their own relation who did not put in place one of these power before their mental demise. By seeing the problems first hand they say “I don’t want that to happen to me or my family”. Often it is concerned relations – sons and daughters looking out for aged parents who prompt the idea into action.
When should I make the LPA?
They best advice is to make the LPA as soon as possible because if you lose mental capacity (unless you have already put in place a LPA) then it is too late. The loss of mental capacity can come in gradual ways such as dementia (if diagnosed) but also in more sudden and traumatic ways such as a result of an accident leading to a coma or illness /stroke /heart failure etc. In those cases there may be no time to put in place such arrangements.
It is a common misunderstanding that it will not affect you. In a sense you are correct because it will be your loved ones and/or family members who will suffer.
Can I make a LPA if I am at the early stages of dementia?
Yes. It is possible to make a LPA at this stage. Dementia may be diagnosed at an early stage and at that point you still have the mental capacity to manage your own affairs. Hopefully this capacity will continue for many years. You can also put that to good use and make a LPA (and possibly will) so that your affairs are prepared for the future. It will be a difficult time but you should consider putting in place a LPA at the earliest possible stage after diagnosis.
What things can be covered by a LPA?
There are two types of LPA.
The first is a financial LPA. As the name suggests it enables your attorney to make decisions about your finances (paying bills, running your bank accounts, investing money) and your property (buying, selling or renting your houses or flats or commercial property).
This may include operating your bank account, buying and selling investments, selling your home or buy to let property or running your business.
The second is a health and welfare LPA. As the name suggests it enables your attorney to make decisions about your health and welfare. This may include deciding where you live, what you eat and what medical treatment you receive.
A key difference is that a property and financial affairs LPA can be used while someone still has capacity, whereas a personal welfare LPA can only be used once they have lost it.
How can we help?
We can help you decide who to choose as your attorney, how many attorneys to appoint, whether to appoint substitute attorneys and whether to give wide or limited powers to your attorneys. We can also sign the certificate of capacity.
Who can be your attorney?
Clearly you want to choose someone you trust. Quite often this is your spouse, a family member or a close friend.
Legally they need to be over 18 and not bankrupt.
They must also be willing to take on the role, which is a serious responsibility.
It is their duty to make all decisions in your best interests and they must follow certain principles set out in the Mental Capacity Act aimed at making sure you are encouraged to make your own decisions where possible. As a donor, you can restrict or specify the types of decisions the attorney can make, or you can allow them to make all decisions on your behalf. We would encourage you to discuss the idea with your proposed attorney before coming to see us to make sure they are prepared to take this on.
You may also want to take into account their age and heath. If in doubt you can appoint a few attorneys to act together or independently of each other.
Is there anything to protect me in the LPA procedure?
To protect your interests, an LPA must be signed by a certificate provider – a solicitor or someone else of your choosing – who certifies that you understand the LPA and have not been pressurised into signing it. You could choose close friends or relatives (other than your chosen attorneys) to be your certificate provided who must be formally told that you are setting up an LPA and given the opportunity to raise any concerns.
Remember also that you are not suddenly giving up control.
We can ensure that you choose whether the LPA can be used either before, or only when, you lose mental capacity. The LPA man in fact never come into use if you never lose the requisite capacity to manage your own affairs.
Do I need to do anything further once the LPA is signed by myself and my attorney?
We will be required register the LPA with the Office of the Public Guardian (OPG) before it can be used by your attorney and you can decide, in the case of a financial LPA, whether it comes into force on registration or only when you lose your mental capacity to make your own decisions. Health and welfare LPAs as noted above only come into force when you lose your mental capacity.
Do I need a Lasting Power of Attorney (LPA) if I have an Enduring Power of Attorney (EPA) in place already?
LPAs were introduced in October 2007. They replaced enduring powers of attorney (EPA) at that point but any EPA created before October 2007 still remains perfectly valid. Do check however the date of your EPA and make sure it is before October 2007.
What are the benefits or advantages of making an LPA?
- It will be reassuring to know that, if you are unable to make a decision for yourself in the future, the attorney you choose will make these decisions for you.
- The LPA ensures that the person you want to make decisions for you will have the legal ability to do so.
- The LPA may prevent a third party or someone you may not trust, either taking advantage of you or your finances or having this power if they apply to the Court of Protection to be appointed as your deputy.
- The making of the LPA now make things easier for your family and friends in future if you lose capacity.
- It will reduce the cost and time required to manage your affairs in the future.
- It can help to start family discussions and friends on what will happen in the future and hopefully kick start planning for these types of events.
Do you need a lawyer to put in place a LPA?
Without legal advice, there is the danger of making errors in drafting the form that can make life unintentionally difficult for your attorneys in the future, or which can cause the OPG to reject it. The LPA can be a daunting form for some people to complete even with the assistance from a lawyer.
Is it expensive to make an LPA?
It is a lot less expensive than making an application to the Court of Protection for the appointment of a deputy which is what your next of kin may have to do if you don’t have an LPA.
Do you provide a fixed price fee for dealing with the Lasting Power of Attorney?
At Kenneth Elliott and Rowe we offer fixed fees but, unlike most solicitors, we are transparent about our charging regime. All you need to decide is whether you want a financial LPA or a health and welfare LPA or both.
- For a single person making one LPA our fee is £500 plus VAT .
- For a single person making both financial and health and welfare LPA’s our fee is £750.
- For couples making one LPA each our fee is £750 plus VAT .
- For couples making both financial and health and welfare LPA’s (i.e. 4 LPAs) our fee is further discounted to £1,000 plus VAT.
To register the LPA there is a Court Fee. This is a maximum sum of £82 for each LPA (bear in mind therefore if there are two LPAs there will be a fee of £164 and so on). The Court Fee does reduce to £41 if the Donor’s income is less than £12,000 pa or £0(nil) if the donor is in receipt of certain means tested benefits. For reasons which we explain above it is advisable to register the Lasting Power of Attorney when put in place.
Remember this includes attending the Donor (the person making the Power) to take instructions, providing advice in writing, preparing the LPA forms and any notice forms and the application for registration. Attending upon the Donor is simply a lawyer phrase to explain that we will meet with you to explain and sign the LPA and sign the capacity certificate*. After this we will arrange for the Attorneys to sign, deal with the serving of the required notices and lodge the completed LPA with the Office of the Public Guardian. Once this process has been completed and the LPA formally registered we will report to you on the registration date and forwarding the registered LPA to you.
We normally make an additional charge based on home or hospital visits (for example a visit to the Queens Hospital in Romford adds £50 plus VAT per trip).
In some circumstances we will not be able to sign the capacity certificate if you do not pass the tests we employ. In these cases a doctor will be needed to sign the capacity certificate and a supplemental charge will be made to cover this extra cost.
Our fees are fixed and includes providing all face to face advice concerning the proper completion and grant and applying to the Court to register the Lasting Power.
We offer a home service for clients in Havering including Romford Hornchurch Harold Wood Harold Hill Gidea Park Barking and Dagenham who require a Lasting Power of Attorney.
Who are you?
Kenneth Elliott + Rowe are a firm of solicitors in Romford Essex who specialise in dealing with Lasting Powers of Attorneys. We can assist you in setting up the Power of Attorney for you or your family members with confidential and expert advice on your needs going forward.
What steps do I take now?
If you would like to make an appointment please telephone us on (01708) 757575 and ask for David Farr or email email@example.com