The population of the UK is growing older and surviving longer. There are greater numbers of “more senior” citizens now than ever before, and this brings with it many more people who, for whatever reason, be it mental or physical, are or may become unable to deal with their own affairs. If no action is taken, this situation can only be solved by lengthy, complex and expensive applications to the Court of Protection for what are called Deputyship Orders.
These are court orders giving authority to the applicant to act on behalf of the incapacitated person. They are somewhat cumbersome and restrictive and, in my view, to be avoided if at all possible.The solution is to put in place, at a time when the individual retains capacity to do so, a Lasting Power of Attorney (commonly referred to as LPA’s.
There are two types of LPA, one dealing with Property and Affairs, the other with Personal Welfare. The latter enables the attorney to deal with the day to day care of the donor (the person making the LPA) and make decisions relating to medical treatment and suchlike (although this version only becomes operative when the donor can no longer make such decisions for themselves), whilst the former, which is far more common, does what it says on the tin and allows the attorney to deal with the donor’s property and affairs.
Effectively it places the attorney in the shoes of the donor and permits any action in relation to the donor’s property which the donor could have taken themselves had they been able to do so. LPA’s are not just useful for the elderly or infirm. They can also assist in business situations, enabling a business to continue to be run in the event of a partner or director falling ill or being involved in an accident. In short everyone should consider preparing LPAs when looking at Wills and Estate Planning, or in the light of their own personal circumstances, independently of that exercise. You may recall, or indeed have in place, the predecessor of the LPA, the Enduring Power of Attorney (“EPA”). If you have these, and the terms of the EPA are still in accordance with your wishes, they remain valid and can still be used as and when needed. Under the current rules however it is no longer possible, since October 2007, to make new EPAs and an LPA is the only way forward. So how do they work?
An LPA is made by completing a prescribed form, which is quite lengthy and must be completed correctly for the LPA to be valid. This can appoint up to four attorneys to act on your behalf either “together” (so they would all have to sign a cheque for example) or “together and separately” (so that any one attorney could sign that cheque). Most people limit the appointment to one or two attorneys. You can also appoint replacement attorneys to step in if the original attorney is unable to continue for any reason. There has to be a certificate provided which confirms that the donor is of full capacity and understands the nature and effect of the LPA. This is usually provided by us.
You can give your attorneys “carte blanche” to deal with all of your affairs, limit them to specific areas or add guidance as to how you want them to act. Once completed, the LPA must be registered with The Office of the Public Guardian (“OPG”) before it can be used. This process takes a minimum of five weeks and usually requires the donor to have nominated two individuals to receive notice of the application to register. This is designed as a safety net as the individuals so named can object to the registration is they feel it is not being made in the best interests of the donor.
Once registered, the LPA can be retained by the donor until needed or brought into operation straightaway. In the latter case, the donor could continue to deal with his or her affairs as well as the attorneys unless and until the donor become incapable. In summary therefore, LPAs represent the best solution to enabling an individual’s affairs to be looked after by chosen attorneys. They give peace of mind that someone you trust will look after your property when you are no longer able to. As with most things in life, it’s essential to plan ahead though and not leave things too late.
At Cleggs we offer a rounded service. Advice about LPAs will most probably encompass discussion about your estate generally. Everything is backed by access to advice on your business and personal affairs generally. We work closely with both Financial Advisors and Accountants to make sure all the bases are covered.
For more information, call Mark Williams on 0115 977 5877 or e-mail at firstname.lastname@example.org. Don’t put it off again, do it now – peace of mind is worth its weight in gold!