The use of large up-front fees and disproportionate deposits has already resulted in significant cost consequences for one care provider.
This is the first of our two part segment, where we’re taking the opportunity to outline some of the benefits and to dispel some of the myths.
Making a lasting power of attorney
A lasting power of attorney (“LPA”) is a document which allows an Attorney to make decisions on behalf of the Donor. There are two types of LPA which govern different types of decisions.
1. Property and Financial Affairs LPA
This enables the Attorney to do things such as: managing a bank account and investments, paying your bills, collecting benefits or a pension, pursuing a litigation claim and selling your assets such as your shares or your home. There is also limited authority to make gifts to charities, friends or family.
2. Health and Welfare LPA
This enables the Attorney to be involved in decisions such as: how and where you receive care, whether life sustaining treatment should be suspended and who is permitted to visit you in hospital or at home.
The benefit of making an LPA is that the Donor chooses the Attorney (or multiple Attorneys), rather than the State appointing somebody in their stead.
Do I need one?
In the absence of a valid LPA, then if you were to lose mental capacity, Health and Welfare decisions are most likely to be made by health and social work professionals, who may not necessarily know your wishes. In addition, without a valid LPA, anybody who wishes to deal with your money or property would need to make an application to the Court of Protection to be appointed as your Deputy; this is a decision at the discretion of the Court and can incur additional costs as well as lengthy delays.
How do I make one?
The forms are available to download from here but do not come into effect until they are registered with the Office of the Public Guardian (which incurs a fee). A Property and Financial Affairs LPA is operational as soon as it is registered; whereas a Health and Welfare LPA only becomes active when the Donor has lost the capacity to make those decisions themselves.
Who should be my Attorney?
In order to obtain the most value from an LPA, the Donor/Attorney relationship requires a significant degree of trust. An Attorney is not subjected to independent supervision, although there are safeguards within the registration system to minimise the chances of undue influence. These safeguards are likely to be effective only after a problem has arisen.
How can I retain control?
In addition to choosing an Attorney that you trust implicitly, the LPA document allows the Donor to lay down guidance for the benefit of the Attorney. This can be done either by way of a separate note of wishes, as you would write a letter to a friend, or within the document itself which enables the Donor to lay out strict permissions and prohibitions. For example, you may wish to express the desire to continue to make donations to certain charities, or you may wish to explicitly prohibit your Attorney from preventing anybody visiting you if you are receiving care.
Can I prepare the documents myself?
The Government’s intention is that you should be able to download the forms and complete the whole process yourself. The forms and process however is still not entirely straightforward.
A Power of Attorney is also a very important document which gives others significant authority and control (often unchecked by a third party). There have been an increasing number of cases reported by the courts where Attorneys have mismanaged a person’s affairs. These have included theft, failure to pay bills and inappropriate investments.
Can Anthony Collins Solicitors help?
We have helped clients and given talks on these topics over a number of years. We have also been involved helping families where matters have gone wrong and so can highlight issues to consider.
For more information
Contact our Personal Planning and Management Team on 0121 212 7404 about how you could benefit from an LPA, and how to tailor it to your specific needs.
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