old people
It's now a fact that as our population lives longer there will inevitable be a greater number of people who will suffer from losing their mental capacity to make decisions. Now where a person looses their ability the Court of Protection is called in to appoint someone to take over a person’s financial affairs.
With this in mind it is therefore more important than ever to make a lasting power of attorney (LPA) to ensure that the “right” people are dealing with your financial affairs. However, even once an LPA is in place, there are other hurdles which can cause attorneys problems.
Chris Thurlow of Hart Brown sets out his top ten tips on what you should do if a loved one is at risk of losing their capacity.
1.Don’t leave it until too late
Once a person no longer has capacity to make an LPA it is too late to make one. Do not leave it until your loved one is already losing capacity – plan ahead whilst they have capacity and get an LPA in place.
Illness and accidents can strike anyone of any age at any time. Make an LPA now and do not leave it to chance.
2.Get it registered
An LPA cannot be used until it has been registered with the Office of the Public Guardian. At present, it can take 3 to 5 months to get an LPA registered and in the meantime, nothing can be done! An LPA can be registered at any time once it has been made. Why wait? Get it registered now so that it can be used as soon as it is needed.
3.Getting the information
If your loved one has lost capacity and you need to take control of their financial affairs, you will need to register the LPA with each of the financial institutions that your loved one had dealings with. They will require either the original or a copy certified by a solicitor. Where possible, only provide a certified copy as once the original has been lost there can be no replacement.
Remember to contact all relevant institutions – think about banks, building societies, the Department of Work and Pensions, private pension providers, National Savings, portfolio manager, accountant, financial advisor.
4.Deciding on investments
As an attorney, you are now expected to look after the assets of your loved one. You may be able to leave investments as they are but there may be better ways of investing to get a better return or a more tax-efficient outcome. Take advice from an independent financial advisor, preferably one who has no links to particular financial institutions, so that they can give you the best advice.
5.What would your loved one want?
Remember that you must act in your loved one’s best interests. You are acting in their place and on their behalf. Always take into account their wishes and their needs when making decisions.
6. Paying care fees
One of the biggest expenses where your loved one has lost capacity is paying for their care. You may not have immediate access to funds whilst the LPA is being registered with the bank/building society. Explain this to the care home or provider and they should be understanding – they deal with this all the time.
Also remember to make sure that a proper assessment is carried out by the local authority of your loved one’s needs and how much they should contribute towards their care. It may be that the local authority will pay some or all of the fees or even that your loved one will qualify for full funding by the NHS.
7.Making gifts
As an attorney, you have a very limited ability to make gifts from your loved one’s assets. Regular gifts that they may have made before on special occasions such as birthdays, anniversaries or religious events should be ok but larger gifts must be authorised by the Office of the Public Guardian. Failure to obtain that authority could leave you having to personally pay the money back!!
8.Health and welfare decisions
As well as an LPA to deal with your loved one’s property and financial affairs, they should consider making an LPA to give you authority to make decisions for them about their health and welfare, such as decisions about medical treatment that they receive and even decisions on life-sustaining treatment. Again, don't leave it until too late. Make the LPA now.
9.Make an LPA yourself
You will see how much work there is for an attorney. However, this is still less work than is required by a deputy appointed by the Court. Seriously consider making an LPA for yourself as well in case you suffer an accident or illness and lose your own capacity.
10.Take professional advice
With many potential pitfalls, it is always worth taking professional advice from a solicitor when making and register an LPA. For example, what if your loved one only appoints you as an attorney and then you are no longer able to be an attorney? A professional will assist in ensuring that appropriate backup provisions are in place. Solicitors are aware of the issues that can arise and can help to make the process as smooth as possible.
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