“The only way to predict the future is to have power to shape the future”
Eric Hoffer (1898 – 1983)
We strongly believe in and support the process of planning ahead, well in advance of any eventuality wherever possible, especially where an individual or loved one may no longer be able to make important decisions about their finances or health and welfare. It is vital to ensure appropriate provisions are in place in case circumstances change.
World Alzheimer's Day takes place on September 21st every year and Alzheimer's organizations around the world concentrate their efforts on raising awareness about Alzheimer's and dementia.
According to the Alzheimer’s Society the number of people with Dementia is significantly increasing in the UK, due to more people living longer. It is estimated that 1 in 3 over the age of 65 in the UK, will develop Dementia (NHS UK), and that around 225,000 people develop dementia every year.
Setting up a Lasting Power of Attorney (LPA) can save time, money and avoid complications if somebody becomes incapable of deciding what should happen with their wealth or personal welfare.
What is an LPA?
An LPA is a legal document that allows an individual (the Donor) to appoint others (the Attorney) to make legal decisions on their behalf about personal affairs such as finances, property, health and welfare at a time in the future, should they become physically or mentally unable to do so.
Anyone aged 18 or over can make an LPA as long as they have the mental capacity to understand its meaning and the effects.
More than one Attorney can be appointed, but it is important to consider how this is done; it should be clear whether Attorneys should act jointly, in which case all Attorneys are required to sign relevant documents together. This can act as a safeguard to ensure everyone is in agreement when important decisions need to be made. A disadvantage of this approach is that if one of the Attorneys cannot act, or refuses to make a decision, then the power fails. Multiple Attorneys can also be appointed to act jointly and separately, meaning that they can act on their own or together. This offers more flexibility as it allows Attorneys to act on their own should other Attorneys be unavailable or unwilling to act in the future.
Types of LPAs
There are two different types of an LPA; Property and Financial Affairs and Health and Welfare. You can have one or both, and they are independent of each other so different Attorneys can be appointed for either.
Property and Financial Affairs LPA
This allows the Attorney to make decisions on the Donor’s behalf about property and affairs including payment of bills, collection of income and benefits and selling a home, subject to any restrictions or conditions.
It allows Attorneys to sign cheques, open and close accounts, make gifts and even sell property belonging to the Donor.
If the Donor does not wish for the Attorneys to have such powers then conditions or restrictions can be put in place. A Donor could include a condition that their Attorneys must act in a certain way or cannot act at all until the Donor has become incapacitated to the point they are incapable of making rational decisions themselves. As an example, a restriction could be put in place to state that the Attorney cannot sell the Donor’s property until the Donor becomes mentally incapable of choosing whether or not to do so.
Health and Welfare LPA
This allows the Attorney to make decisions on the Donor’s behalf about their personal welfare, including allowing or refusing consent to medical treatment and establishing any suitable future living arrangements. A Donor can assign as much or as little freedom of responsibility to the Attorneys as they choose – the Donor decides how much power Attorneys have in relation to any personal affairs.
If there are no conditions or restrictions included in a Health and Welfare LPA, the Attorneys will have more freedom in relation to the Donor’s personal welfare. This might include deciding a permanent place of residence, establishing appropriate care needs and/or allowing consent to medical treatment. Conditions or restrictions within a Health and Welfare LPA could specify that the Attorney must consult a particular individual in order to make a certain decision, or restrict what they can do.
If a Donor wishes to allow Attorneys the power to make any decisions about a life sustaining treatment, permission to do so must be specifically expressed within the LPA. If this permission is not stated, such decisions will be left to health professionals.
With the rise in the ageing population and more families affected every year, planning ahead allows for greater clarity and certainty of individual wishes for others to act quickly, when most needed. An LPA is an essential planning tool for this purpose.
To ensure certainty in the future, we’d highly recommend exploring the options with your solicitor or your COURTIERS Adviser.
A Lasting Power of Attorney is a legal document whereby an individual, known as the Donor, appoints another individual who they trust, as an Attorney, to make those important financial and health decisions on your behalf if you lose the capacity to do so yourself.
An Attorney is the person who has been entrusted by the Donor to make those important financial decisions on their behalf, when they no longer have the capacity themselves at some point in the future. You can have more than one Attorney or just the one, and they can act jointly or severally, or jointly and severally, but they must be over the age of 18 and also it’s important that they have the capacity to understand what they’re doing at the time of making those important decisions for you.
So there are two types of Lasting Powers of Attorney; there’s the Property & Affairs, and Health & Welfare. With the Property & Affairs Lasting Power of Attorney you’re giving the Attorney the responsibility to make those important financial decisions on your behalf and these can range from paying your bills, withdrawing monies, managing your bank accounts to more serious expenses and financial obligations such as taking into consideration the cost of care, paying care fees, even having the ability to sell your main residence to pay for long term care.
With a Health & Welfare Lasting Power of Attorney, you’re giving the Attorney the power to make important health decisions on your behalf when you’re no longer able to do so yourself. These can be such as allowing or refusing medical treatment to making sure they’re establishing a place to live for you and also they can make important decisions about life sustaining treatment if ever needed.
It is very important however that you specifically state what you would want in that event, within the Lasting Power of Attorney document. If there are no specific instructions of what you would want, the decision would be left down to a medical professional.
The fact is more and more people are living for longer. The Office of National Statistics (ONS) estimate that there’s currently 14,000 people who are aged 100 or over in the UK and according to the Alzheimer’s Society, the number of people who have dementia is significantly increasing in the UK. NHS UK estimate that one in three people over the age of 65 will develop dementia, so as you can see it’s paramount that the correct provisions are in place for an Attorney to act on your behalf when they need to.
The Government website and the Age UK website have a lot of useful information and although you can set up a Lasting Power of Attorney yourself by completing the relevant documentation, a Solicitor may be best placed to provide specific guidance and set this up for you, as well as register it for you. Of course, please do speak to your COURTIERS Adviser who can provide further information and point you in the right direction.
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