Many people ask us if they really need to create a Lasting Power of Attorney (LPA). This document is often associated with dementia and Alzheimer’s and although both of these are contributing factors to why an LPA is important, it is often used when we require additional assistance, such as getting older, or may be suffering from an illness and even, to help manage our affairs if we are going to be out of the country.
There is a misconception that if we are married, we do not need a Lasting Power of Attorney for our spouse, but again this is not true. Without such an important document, difficulties can be experienced with Local Authorities and financial institutions which can cause a great deal of distress to loved ones during what is an incredibly difficult time.
What will happen if I don’t have a Power of Attorney?
There are many examples when not having an LPA in place has caused difficulties and below we provide an example of how not having such a document in place can cause difficulties for the family.
Peter is 64 years old and married to Sue with two adult children. He has recently suffered a stroke and his family has been told that he will not recover. All of Peter’s bank accounts have now been frozen including those which are held jointly with his wife. His wife has been told that she cannot sign or act on his behalf as there is no LPA in place and therefore, she needs to make an application to the Court of Protection for a Deputyship Order. Such an application is going to take between 6 and 12 months and the total cost will be between £2,000 and £3,500.
Sue needs to be able to complete a financial application as Peter is no longer able to remain at home as he requires day to day care. In addition, her household income is restricted as she is unable to access all the bank accounts.
Due to Peter having to go into care, Sue has decided that she would like to move into a smaller property closer to her children. This cannot happen as she is unable to sign the sale contract for the property on behalf of her husband and therefore, she will need to wait until the outcome of this application.
After making the Court of Protection application she is successful in being appointed as her husband’s Deputy but she must first take out an insurance policy to protect her husband’s assets at a cost set by the Court. In this case £500 each year.
Sue has now been authorised by the Court to act on her husband’s behalf regarding all financial matters and this has taken nearly a year to put in place. She now needs to keep detailed accounts and make regular reports to the Court. There will also be fees for different requests by the Court. This administration will go on daily unless her husband recovers or passes away.
Why do I need a Power of Attorney?
However, if Peter had made a Lasting Power of Attorney the situation would have been very different. His wife would have been able to access all bank accounts immediately and complete any financial assessment to help him move into a care home which would be able to provide for his day to day needs immediately.
Sue would have been able to sell the property and sign the contract on her husband’s behalf and move quickly into a property nearer to her children.
She would then be able to make decisions on her husband’s behalf without having to obtain the Court’s regular authority.
The cost of a Lasting Power of Attorney is far less than that of a Court of Protection application for a Deputyship Order. In addition, an application for a Lasting Power of Attorney can be completed within several weeks, as opposed to a Deputyship Order which can take up to 12 months.
People often comment that they have found the costs at many law firms to be too expensive. We offer all our services on a fixed fee basis and our fees are inclusive of all work necessary to complete your Lasting Power of Attorney from start to finish.
We ask all our clients to be mindful that should you instruct anyone to complete your Lasting Power of Attorney, make sure they set out clearly all the costs involved. There are many online companies which offer an initial low price and then additional costs are added on such as acting as your Certificate Provider and preparing registration paperwork. All these services are included our fixed fee, together with the peace of mind of having qualified lawyers and a regulated law firm acting for you in connection with your matter. Please click here for further information about Lasting Powers of Attorney and how we can help.