If, like many people around this time of the year, your finances are tight after the expense of Christmas, you might not be thinking about what would happen if you couldn’t actually sort out the payment of your bills, writing cheques, moving money around to get the best savings deals and the 0% interest rate on a new credit card.
However, there is never any better time to think about this than right now. What would happen if you were unable to manage your finances? No-one likes to think about what “might” happen but we all have to be realistic and decide what would need to be done and who will do it for you if someone “did” happen.
What would you do if a parent or other family member suffered a stroke, was diagnosed with Dementia or was unable to manage their finances? The law does not allow just anyone access to bank accounts or savings. In fact, joint accounts may be frozen if a bank becomes aware that one of you has lost capacity because they have a duty to protect the other and it is what the British Banking Association advises. The law does not permit another person to sign legal documents without express consent. What do you do if that consent cannot be given? The answer is a Lasting Power of Attorney.
We see at first hand the emotional distress that the loss of a person’s capacity and ability to manage financial affairs can bring to their loved ones. As well as the stress, time and paperwork that the family members have to deal with in order to apply for Deputyship (this is a Court Order permitting someone to deal with another person’s affairs) it usually takes around 6 months for an Order to be issued. This can be easily avoided by preparing a Lasting Power of Attorney.
A Lasting Power of Attorney is a document you can make to give your Attorneys permission and your authority to act on your behalf if you lack the understanding to make decisions for yourself. There are two types of Powers to make:
-The first relates to your financial affairs
- The second relates to your medical and day to day decisions.
Both Powers are required to be registered at the Office of the Public Guardian and once the financial affairs Power is registered, your Attorneys can assist you if you require help, even if you haven’t lost capacity.
Simply put you could be fed up or wish to have help because you are becoming physically frailer to manage your affairs. However, a Health & Welfare Power can only be used to make decisions on your behalf once you cannot make these types of medical and day to day living decisions for yourselves
If someone does not have the capacity to manage their affairs and does not have a valid Power of Attorney in place, the alternative is for a person to make an application to the Court of Protection to become their Deputy, to act on their behalf in relation to their affairs. As well as the initial court application fee of £400, it takes around 6 months to be appointed and there are annual fees payable until a person passes away (which can be in many years) which include assessment fees, payment for a security bond as well as the Deputy having to prepare and submit accounts to the Court for inspection. Our clients have found that when compared to the time taken and costs expended in the preparation of a Lasting Power of Attorney as opposed to a potential Deputyship application, they prefer a Lasting Power of Attorney.
We strongly recommend creating a Lasting Power of Attorney to our clients and always advise seeking independent legal advice if you are considering doing so. If you have any questions or wish to ask a member of our Private Client Team about Lasting Powers of Attorney, please do not hesitate to contact us at firstname.lastname@example.org on 01293 596900.