For many, we plan for our future through the making of a Will, which essentially makes clear your wishes for your estate when you die. However, oftentimes very little consideration is given to the planning for the future for your needs when you are living, and importantly who would legally step in and take care of your matters should you be unable to. This is where a Lasting Powers of Attorney is needed.
What is a Lasting Power of Attorney?
A Lasting Power of Attorney (also referred to as an LPA) is a legal document that allows you to appoint one or more people you know and trust (known as attorneys) to help you make decisions on your behalf. LPAs are not just for old age, they can also be used if you were to have a bad accident or become critically ill.
There are two types of LPA: financial and property and health and welfare. A financial and property LPA is used to allow your attorneys to make decisions for you about your money and property, for example managing your bank account or selling your home and a health and welfare LPA can give your attorneys the power to make decisions about where you might live or medical care.
The website This Is Money states that "Lasting Power of Attorney is a legal failsafe for people who can no longer fend for themselves" and "Without an LPA, families can find themselves locked out of an ailing loved one's finances and forced to apply for deputyship. This involves a complicated court process and fees running into many thousands of pounds".
So why do I need a solicitor to draft my LPAs?
Firstly, when you instruct a professional, you are instructing someone with experience in this area. The law and practice surrounding LPAs can be daunting as it is constantly changing and developing. By instructing a solicitor, you will have professional and knowledgeable advice from someone who is up to date with all the changes in the law and is aware of the impact they may have on you as an individual.
Advice specific to you
Secondly, your solicitor will be available to answer any questions you have as and when you require advice. They also know the right questions to ask you, which allows them to help you make the decisions that best suit you and your family.
The idea of an LPA is to give you control over what happens to you if you cannot make your own decisions - perhaps you want to live close to your children or you want to only invest in sustainable and ethical companies. Whatever your wishes, a solicitor will be able to discuss your requirements with you and will tailor your LPA to you according to your circumstances, wishes and preferences.
A carefully drafted LPA will help protect you in the future. It is important to future proof your LPA as much as possible as you cannot amend them once registered. Your solicitor will talk through the options with you and a carefully drafted LPA will ensure that you save both time and money in the future and ensured that all your wishes are adhered to.
Thirdly, the process of obtaining an LPA is very precise and particular. Often applications are returned to applicants due to practical errors, such as signing the application in the wrong order. The Office of the Public Guardian (OPG) have reported that 15% of the applications they receive have mistakes in them and are therefore rejected.
It is important to note that sometimes the OPG can fail to notice any discrepancies (such as a wrongly spelt name) which can mean a registered LPA may be rejected by a financial institution, even though it has been formally registered, rendering the LPA useless. This is not only expensive and time-consuming, but it may also be impossible to rectify again if the person granting the LPA no longer has capacity.
By instructing a solicitor, the complicated and very precise process can be sped up as they know how to proceed and get it right the first time.
Furthermore, a badly drafted LPA can actually restrict your attorney’s powers. It is important to not include any instructions that contradict with any other part of the form, nor can you ask the attorneys to do something illegal. If you have complicated instructions, a solicitor will be able to give you the best advice on whether your instructions are legally valid and how best to word them.
Protection from fraud
Instructing a solicitor also means you can be confident that you and your assets are protected - ‘DIY’ LPAs can potentially leave you vulnerable to fraud, coercion, and financial abuse. By instructing a solicitor, they also act as an important safeguard by fulfilling their role as an independent ‘Certificate Provider’ who will confirm that your wishes are being met, there is no undue influence, and you are not being persuaded to sign something you do not fully understand.
What happens if I do not make a Lasting Power of Attorney?
Unless you have a valid Lasting Power of Attorney in place, no one has the automatic right to manage your affairs. It is a common misconception that your spouse or next of kin can make financial decisions on your behalf, however this is not the case - your next of kin or spouse have no legal responsibilities or authority to make any decisions on your behalf. For example, if you are required to move into a residential care home, they cannot access your bank accounts to pay your care fees.
How do you apply for deputyship if there is no Lasting Power of Attorney?
If you do not make a Lasting Power of Attorney and you lose mental capacity, your family and friends will have to apply to the Court of Protection to obtain deputyship. A deputy is someone who is appointed by Court of Protection, and they can make decisions on your behalf, when you do not have the capacity to make decisions yourself. An application to become a deputy is a long procedure that requires several paper forms and can take several months (if not longer) to complete as a result of the Court’s backlogs. It is important to know that deputyship does not always grant your deputies full powers to deal with your financial affairs and you may have to return to the Court to ask for further permission, such as permission to sell the property, which can prolong the application further. Prevention is better than a cure, and it is important to make an LPA to avoid an application to the Court of Protection for deputyship, which can cause further stress, both financially and mentally for you and your loved ones.