The topic of Lasting Powers of Attorney (LPA) has been in the news a lot, lately. A recent survey revealed that 71% of people don’t have plans in place for end-of-life arrangements, while two thirds haven’t even made a will! LPAs and wills are both essential future-proofing documents to ensure that your wishes are followed and your family are protected should the worst happen, but too often these simple legal processes are put off and off until it’s too late.
However, it’s vital that any end-of-life preparations are made via an experienced and professional solicitor, as mistakes are easy to make and could end up causing unnecessary upset, cost, and disruption later down the road.
There are two different types of Lasting Powers of Attorney available – one that covers property and finances, and another that manages health and care. Both work by giving permission to a trusted person (or persons) to handle the donor’s affairs in the event they lose the mental capacity to do so. But an LPA is only effective if it has been drawn up by a qualified solicitor and there are certain areas where people commonly become confused – or, worse, fail to make the necessary arrangements to ensure that their affairs are taken care of properly. For example:
Not knowing the rules around LPAs:
It might sound obvious but it’s really important that both donor and attorney know what they can and cannot do when it comes to Lasting Powers of Attorney. For example, if the donor has gifts set up in their name, an attorney will need permission from the court of protection to carry out these wishes to make sure it will not affect their ability to pay for care. A poorly-drafted LPA can also be challenged by family members if it turns out it does not adequately protect the donor’s wishes.
Waiting until it’s too late:
End-of-life care is not an easy subject to talk about, and it’s easy to keep putting these kinds of arrangements off because you’d rather not deal with it – or assume that you won’t need an LPA until much later in life. But it’s never too early to make a will or arrange LPA. The future is always uncertain, and it’s much better to have these safeguards in place and not need them for a long time than find yourself without protection should the worst happen. Similarly, if you or a loved one has an LPA in place and you are worried about loss of capacity, don’t go into denial – have a discussion about it, consult with your solicitor, and decide on the best course of action to make it easier on everyone involved.
Accidentally denying access to necessary finances or services:
Incorrectly set up LPAs may restrict access to certain accounts, or leave the donor without financial support if adequate instructions are not in place. For example, if there is no clause that says an attorney can instruct a financial advisor who handles certain assets for the donor, they may be unable to make changes or release funds. Similarly, some banks will not extend credit to customers using an attorney without specific instruction. When setting up an LPA it’s important to consider a range of potential future circumstances to cover all bases and ensure that your chosen attorney will be able to act on your behalf.
Running the risk of financial abuse:
According to a recent poll, 25% of people over the age of 45 have access to a relative’s financial accounts, many of whom do not have a formal agreement in place regarding safe use. Unfortunately, without an LPA, informal agreements like this sometimes lead to financial abuse. In some cases, it may not even be intentional – simply a case of a relative doing their best to manage the situation without clear instructions, but before you know it the money is gone and the vulnerable person’s wishes have not been taken into account. A professional LPA protects both sides from this kind of situation, and ensures that a donor’s finances, property, assets and healthcare plans are managed according to their personal choices.
Like any legal process, to arrange Lasting Powers of Attorney you should consult an experienced, professional, qualified solicitor. End of life arrangements are just as important as any other form of insurance, and need to be tailored to your unique circumstances and needs. Avoid these common pitfalls and get yours set up before it’s too late.
For more information on end of life arrangements, read our guide here, or get in touch with one of our friendly, down-to-earth solicitors.
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