Lasting Powers of Attorney aren’t just for the elderly
Whilst we all recognise the importance of writing our Will, fewer of us will be considering a Lasting Power of Attorney, or an LPA. This enables you to appoint someone to act on your behalf if you’re physically or mentally incapable of making your own decisions in the future.
It’s a common misconception that Lasting Powers of Attorney are only for the elderly. In fact, mental or physical incapability can affect you at any time.
For example, the Alzheimer’s Society predicts that over one million people in the UK will have dementia by 2021, with the disease also affecting people under 65. However younger people still may also find themselves incapacitated as a result of an accident or illness.
So if you’re affected, what provision have you made for your financial affairs, or your health and welfare, to be dealt with on your behalf?
It’s important to note that once you’ve lost the capacity to make important decisions for yourself, it’s already too late for you to make an LPA.
Instead an order will be required from the Court of Protection for someone to be appointed as your Deputy. You won’t have a choice on who that person is, so it’s only by making an LPA that you can decide who makes decisions for you in the future.
We always advise planning ahead, as this case study shows:
Case study: Mr & Mrs Smith
Our clients, Mr and Mrs Smith, have two joint accounts with their bank – a current account which is used to pay the household bills and a savings account which is used to ‘top up’ their day-to-day spending.
Both Mr and Mrs Smith receive the state pension and Mr Smith has a private pension, both of which are paid into their joint account.
Mrs Smith has dementia but since her diagnosis two years ago, she’s been able to manage her financial affairs herself. However when her health began to deteriorate, Mr Smith notified their bank that she had lost mental capacity.
As her husband and joint account holder, Mr Smith assumed that he’d be able to take control of their joint bank accounts.
But as Mr and Mrs Smith haven’t made Lasting Powers of Attorney (LPAs), the bank had the authority to restrict the use of their joint accounts to essential transactions only, such as living expenses, until a deputy for Mrs Smith was appointed by the Court of Protection.
If Mrs Smith had made an LPA whilst she was mentally capable, she could’ve appointed Mr Smith as attorney and he could’ve continued to manage their joint financial matters, without the need to go to court.