Here’s a scary thought
If you do not have a Power of Attorney in place, and you ‘lose capacity’ due to accident or illness, your bank accounts will be frozen (including any joint bank accounts).
Your loved ones would have to apply to the Court of Protection to appoint a Deputy. This might not be the person you would want to make decisions for you, involves rigorous reporting, and is horribly expensive. It could be a complete stranger, and your loved ones would be powerless to override their decisions.
In 2003, Michael crossed a country road in Norfolk, and was hit by a car. He was in a coma for the next three years.
Understandably, his wife Heather was devastated. She had lost the man she loved, and had to look after their children on her own.
Not only that, but straight after the accident she was unable to access the money in their joint account, because Michael couldn’t co-sign any of the paperwork.
They didn’t have Powers of Attorney in place, so while Michael was alive, Heather found herself at the mercy of the so-called Court of Protection. They paid her an allowance, and she had to account for every penny she spent.
It added up to a living nightmare that only ended when he died.
To read Heather’s horror story, please click this link.
Lasting Powers of Attorney (LPAs) are not just for old age
Your Will defines what you want to happen after you die, but an LPA describes what you want to happen if you lose the capacity to make your own decisions while you’re still alive.
- You have an accident that leaves you brain damaged?
- You suffer from dementia or degenerative mental illness?
- You can’t or don’t want to deal with your own financial affairs?
There are two types of LPA:
- Property and finance includes paying bills, making investments, or selling your home. This can be activated any time you choose
- Health and welfare includes decisions such as where you live, and what medical treatment you receive. This is only activated if you lose the capacity to make your own decisions
You can appoint the same or different people to act as your Attorney/s in each case. It’s also wise to appoint backup Attorney/s, just in case the primary Attorney/s can’t serve for any reason. It’s wise to select someone who’s younger, fitter and healthier than you.
LPAs are a way of ensuring your wishes are carried out
- If you are self-employed, you can set up a separate LPA to cover business decisions
- If you are a Jehovah’s Witness, you can specify that you don’t want to receive a blood transfusion
- If you are vegetarian, you can request a meat-free diet
Because they make your wishes clear, LPAs also help avoid family arguments!
- Dementia affects one in 14 people over the age of 65 and one in six over the age of 80. After the age of 65, the risk of developing Alzheimer’s doubles every five years
- Your Attorney can be a friend, family member or professional. They must be aged over 18 and never been bankrupt.
- LPAs replaced Enduring Powers of Attorney (EPA) on 1 October 2007
Our advice – set up your LPAs as a matter of urgency
Death is assured, which is why everyone should have a Will. Accidents and illness are not definite, so LPAs are like insurance. You set them up and hope they will never be used.
Contact us for advice on this.
Note that your LPAs must be registered with the Office of the Public Guardian, otherwise they are about as useful as a chocolate teapot. This currently costs £110 per LPA.
Do it now, and your LPAs will be in place, just in case. It’s sensible financial planning, whatever your age.