The risk of not having a Lasting Power of Attorney
March 2, 2017
If you were ever to lose the capacity to manage your affairs as a result of an illness or an accident and have not made a Lasting Power of Attorney (LPA), your family would have to make an application to the Court of Protection to appoint a deputy to manage your affairs.
What is a Lasting Power of Attorney (LPA)?
An LPA is a legal document which allows you (the donor) to appoint someone you trust (the attorney) to make decisions on your behalf including in circumstances where you lack the capacity to do so. There are 2 types of LPA:-
- Property and Financial affairs
- Health and Welfare
Under a Property and Financial Affairs LPA, your attorneys can act for you in transactions such as buying and selling property, opening and closing bank accounts, dealing with your investments, managing your day to day finances, and claiming benefits and pensions. While you are still mentally capable, they can only implement your wishes and they must help you to make your own decisions even if they don't necessarily agree with them. Only if you lose mental capacity will they be able to make decisions on your behalf.
A Health and Welfare LPA enables your attorneys to make decisions about where you should live, your day to day care and to give consent to, or refuse, medical treatment on your behalf. This type of LPA is very important for unmarried couples who want to ensure that they are the ones who can make these decisions rather than their family members.
You don't have to make both LPAs and many people opt just for a Property and Financial Affairs LPA,but unmarried partners probably should make both. Ensuring an LPA is in place will mean that decisions can be made quickly by someone you trust if you ever lose mental capacity and your affairs can be looked after even if you find yourself physically unable to get to the bank and so on
What happens if you lose capacity but you have not made an LPA?
An application can be made to the Court of Protection for a Deputy to be appointed. Deputyship applications will often be made by your relatives or close friends but can also be made by professionals such as solicitors. Again it is possible to appoint a Property and Financial Affairs deputy and Health and Welfare deputy. However the first type is more common as decisions cannot be taken on someone else’s behalf about their property and financial affairs without formal authority in the form of an LPA or deputyship.
How is a Deputyship application made?
All applications must be accompanied by a medical assessment of capacity. The proposed deputy must complete a set of application forms with details about the person about whom the application is being made. The proposed deputy will also need to provide a set of undertakings to the Court. A Court fee is payable and the application process can be lengthy and expensive
What are the Deputy’s responsibilities?
The Deputyship order will set out the deputy’s powers. The Deputy must also follow the principles set out in the Mental Capacity Act 2005 and the code of practice. They will be supervised by the Office of the Public Guardian and will usually be required to complete an annual report, setting out the key decisions they have made and provide an account of all income and expenses.
So what are the risks?
If you lose capacity without an LPA, your family will be left having to apply to appoint a deputy. It can be a long and expensive struggle to gain access to vital funds. Also, annual fees can drain the assets. If a catastrophic crisis has occurred, family members could be left having to struggle to gain access to your funds which they can only do by way of court order.
Making LPAs for a fraction of the cost charged by the Court of Protection can avoid all the stress, intrusion and expense involved in appointing a deputy. Our top tip and firm advice is not only to make a will, but also to make Lasting Powers of Attorney. Call Beth King on 020 8313 1300 020 8313 1300 or email her on email@example.com for advice and/or a quote.
The information contained in this article is intended for general guidance only. It provides useful information but it is not a substitute for obtaining legal advice as the articles do not take into account specific circumstances. So do please Contact US for legal advice on the issues raised.