Appointing a lasting power of attorney - the benefits of hiring a professional
A lasting power of attorney (LPA) is an important legal document which enables you to appoint somebody else to deal with your financial and legal affairs - or make health and welfare decisions on your behalf - should you need the support in the future.
You can appoint one or more people to be your attorney, it could be a family member, a friend or loved one, or a legal professional such a solicitor or financial advisor.
It’s important to take time to consider who would be fit for this role. In this blog, I outline some of the benefits of using a professional attorney as opposed to a family member or loved one.
The skills required to act as an attorney
Contrary to what most people might believe, a family member may not always be the best attorney for you, which is why I’d like to reassure readers who don’t have children or a close family network that they have the option of hiring a professional attorney.
Being an attorney requires a specific set of skills, as well as a substantial time commitment – something that family members may not always be able to offer. Whether it’s your own children, niece, nephew, or cousin, it’s important you consider your family’s own personal circumstances and availability before appointing them as your attorney.
Consider also whether appointing one relative over another could cause friction – if there’s potential this may cause distress or disputes within your family, appointing a professional attorney is likely to be a more suitable option for you.
If you do decide to appoint a relative, we’d recommend you speak to them about it prior to drawing up the paperwork. Are they aware of the time commitment needed? Do they have the expertise to carry out your wishes? Do they want to do it?
Often, people don’t realise how many decisions they make for themselves every day or week, and when it comes to making decisions on behalf of another person, this can be overwhelming.
Should they sell your home to pay for your care costs? Do they have the time and expertise to work with the estate agent, clear the property, decide what happens to your belongings, inspect the property on a weekly basis to comply with insurance policies, pay bills, repairs – the list goes on.
Attorneys are also obliged to follow various protocols and rules so it’s important to understand what these are before they agree to take on the role.
Although your family may have the best of intentions, being an attorney can be extremely complex and difficult to manage. The highest rate of financial abuse happens when family members are appointed as attorneys – and this may not even be intentional. It’s a complex task, and needs proper consideration, understanding and expertise.
There are two types of LPA - a financial and property LPA, and a health and welfare LPA. Both are incredibly important documents and are used should you become incapacitated (or require extra support in the case of the financial and property LPA) Appointing an attorney is no small thing: you want to ensure your money is spent wisely and that you are looked after in the way you’d like.
Choosing a professional Attorney
Many professionals can be appointed as attorneys - solicitors, independent financial advisers, and accountants for example. However, it’s recommended that you appoint someone who is professionally regulated, insured and a specialist in this area of the law – this way, you’ll be fully protected should any issues arise further down the line.
We’d always recommend appointing a solicitor regulated by the SRA (Solicitors Regulatory Authority), and who is accredited by SFE – proving they have the specialist and technical expertise to support you in managing your affairs should you need it. Therefore, appointing a professional attorney over a family member can prove to be the better option.
Costs of using a professional Attorney
An LPA contains a mandatory charging clause. Within this clause, you can define the parameters of what you’re prepared to pay – and the payment terms you agree with your professional attorney. These will be rough estimates based on your current circumstances because it’s difficult to calculate precisely ahead of time.
Your attorney may provide a charging structure for example. This could include stipulations that the fee would cost no more than X amount or include a fixed hourly rate fee – rather than the hourly rate of the firm.
As the donor (the person making the LPA), you may also want to consider additional stipulations or requirements in your LPA. For example – providing bills and accounts to a third person, having yearly audits, or consulting a third party for big financial decisions such as selling your home to pay for care, so they’re involved in the decision-making process. These stipulations must be workable however and they will incur steeper costs if they become too time-consuming.
If your affairs are complex, professional fees are likely to increase. However, there are ways you can lessen these costs ahead of time. Making sure your affairs are in order will cut down the investigation and decision-making process considerably. Having your will up to date, a funeral plan in place and making sure you have a clear record of your accounts are easy ways you can do this.
Are there other ways you can take away the responsibility from your attorney for the more mundane tasks? Setting up standing orders for your bills for example – anything that will simplify your attorney’s job. Put yourself in their shoes: will they know who you bank with, how you pay for your utilities, and what benefits you receive for example?
It’s important to discuss these details with your attorney at the outset - particularly if you don’t have children or a close relationship with them or your loved ones - as the investigative process can become lengthy and costly. This is also an opportunity for you to express your concerns and formalise your letter of wishes which states details including how and where you’d like to be looked after.
It’s worthwhile checking in with your attorney every so often – that way you can update them on your circumstances and any changes you wish to make to your LPA.
The professional attorney should provide transparent information on costs at the outset. Solicitors are highly regulated and are expected to provide cost updates to clients on a regular basis. If you have concerns about legal fees, including how and when they’ll be charged, discuss it with your solicitor at any time.
Fully Accredited SFE members undertake considerable additional training to become specialists in supporting people to create LPAs and spot potential risks to older and vulnerable people who might be about to appoint an unsuitable attorney.
Find out more about Powers of Attorney here: https://sfe.legal/Public/How-can-we-help/Powers-of-Attorney/