As a practitioner working in this area of law for over 10 years, I see a number of clients who have common misconceptions about the use of Lasting Powers of Attorney (LPA). Hopefully by addressing some frequently asked questions on the subject it will help to spread a better understanding of them.
Making a Lasting Power of Attorney can be one of the best ways to prepare should you ever be unable to make financial or health decisions and should not be delayed. It is always hoped it is never needed but the reassurance it can bring when it is needed is a relief to individuals and their family and friends.
Q: I don’t need an LPA because I have a Will and my Executors will make decisions if I can’t
Lifetime affairs can be looked after by use of an LPA whereas your affairs after death only can be managed by your Executors. Often people think Executors’ powers extend to lifetime affairs but they do not. It is just as important to appoint someone trustworthy and reliable to look after your affairs during your lifetime as it could really affect your way of living if you didn’t have someone immediately available to help.
An LPA enables you to choose a person or persons to look after your financial and/ or health affairs, and to act in your best interests to protect assets and health decisions especially when you cannot make those decisions yourself. Often making such decisions is more relevant during your lifetime as it can affect your standard of living. So as well as having your Will in place to appoint Executors, don’t forget to get your lifetime affairs in order too by creating Lasting Powers of Attorney.
Q: Me and my spouse / partner have joint bank accounts with each other (or our children) therefore we don’t need LPAs, do we?
Having joint accounts or even an appointee-ship with the Department for Work and Pensions are no replacement to LPAs. Having a joint signatory or third party nomination on an account may seem like a ‘quick fix’ but overall it isn’t always a solution to a wider problem. Anyone can add a joint signatory or change an account to be in their joint names but the authorisation only lasts for as long as you have mental capacity. If you were to lose capacity, for instance through dementia or an accident, the bank can remove the joint access as it cannot last during a period of incapacity. Although rare it is possible for them even to freeze the accounts. It is also very limited and would not enable open communication with other institutions or any health decisions to be made for you. A complexity can occur on death too that the joint account passes outside your estate to the surviving owner which may not have been what you wanted and beneficiaries can lose out. This would need to be addressed by a client’s Will rather than a property LPA.
Q: I will get an LPA when I need one, I don’t want to hand over responsibility or control quite yet.
Don’t leave it too late! If you are in a position where you need an LPA to be operational there is a good chance that you may find it harder to do. The person certifying you have capacity to understand the document (known as a Certificate provider) may find it harder to confirm you have the necessary standards of understanding and a doctor may need to be involved at further cost. The very best time to do an LPA is when you are in no rush or have no immediate need for its use. Just by creating an LPA does not mean you lose control or hand over responsibility for your affairs. If anything you are keeping control as you are choosing the person you know and trust rather than that decision being taken away from you.
Rebecca Harbron Gray
Solicitor at Gordon Brown Law Firm LLP
Rebecca began her legal career in Newcastle upon Tyne after obtaining a First class degree.
Formerly a Partner at a Gosforth based firm she joined Gordon Brown Law Firm in November 2012 as the Head of Wills, Trust and Probate Team.
Rebecca specialises in a number of different areas such as Will drafting, administering a loved one’s estate, the creation and registration of Powers of Attorney, the provision of advice to protect the wealth of an individual and planning for future generations.
Qualifying into this area of law in 2005, Rebecca continues to build upon the high level of experience she has with people of an older generation and always strives to understand each client’s needs.
Rebecca is a Trust and Estate Practitioner and one of the region’s few Solicitors for the Elderly Fully Accredited Members.
She does a lot of work alongside the Alzheimer’s Society and recently became a Dementia Friends Champions and is available to provide Dementia Awareness sessions to promote this worthy charity.