Many people feel that they are too young to consider end of life matters. In the UK, two-thirds of the population have not made a will, and an even higher number have not considered setting up a Lasting Power of Attorney (LPA).
Consider Sally, who at 52 suffered an accident that left her with injuries so severe that she lost the mental capacity to manage her finances.
If you do not have a LPA in place, the only option is for your closest friend, partner or relative to apply to the Court of Protection to be appointed as your deputy to manage your finances.
In Sally's case, her children lived abroad and were not able to act as deputy for her. As a result, a solicitor was appointed by the court to make financial decisions on Sally's behalf. If Sally had taken advice about setting up a LPA before her accident, she would have had an opportunity to consider if there was a trusted friend or sibling who she could appoint to act as her deputy, giving her more control over who would make decisions for her.
What is a Lasting Power of Attorney and why should you have one?
An LPA is a legal document which gives another person (your attorney) the authority to make decisions on your behalf, either to manage your finances and / or make decisions regarding your care and treatment. Crucially, an LPA remains valid in the event that you lose mental capacity in the future. Therefore, this is a document which you can draw up while you are healthy and which can be very useful if you become incapacitated in the future.
What happens if I do not have a Lasting Power of Attorney?
Without an LPA, if you lose capacity, like Sally, you will no longer be able to decide who should make decisions about where you should live or how your money should be spent. Instead, the Court of Protection will decide who should act as your deputy and make these decisions on your behalf.
Deputyship is a more expensive option than setting up an LPA. An application to appoint a deputy can cost around £5,000 including VAT, the cost of a medical report, and court fees. Deputies also have to pay annual insurance premiums and court fees. These costs do not apply to attorneys under an LPA.
Additionally, if there is any conflict in the family, this can result in a dispute between family members as to who should act as your deputy and make decisions for you. In such cases, the court may appoint a professional deputy to act on your behalf, whose fees can further increase the financial burden.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.