Acting to stop harm: the FCA and Appointed Representatives
People in the UK are living longer than ever before. This is good news, but it brings with it a multitude of problems. The Alzheimer’s Society report that there are 850,000 people with dementia in the UK, with numbers set to rise to over 1 million by 2025. With these eye watering figures in mind, it is becoming increasingly important that you make clear what should happen in the event that you lose capacity to manage your own affairs.
Lasting Powers of Attorney (LPAs) let you choose who should manage your affairs and make decisions on your behalf if you lose mental capacity. One LPA is for ‘Financial Decisions’. This relates to things like paying bills, managing investments and selling properties. The other LPA is for ‘Health and Care Decisions’. This relates to personal decisions such as where you live, what care you receive and ultimately, whether to turn off the life support machine.
If you lose mental capacity without an LPA, your loved ones will need to apply to the Court of Protection for a ‘Deputy’ to be appointed to manage your affairs. Whilst in some cases this can be appropriate, LPAs have significant advantages over leaving the choice of Deputy to the Court.
When making an LPA, you select the people you trust to act as your attorneys. You can appoint more than one person and you can also provide for back-ups, in the event that your number one choice can’t act for any reason.
If you lose capacity without an LPA, you miss the opportunity to exercise control over who takes on the job of managing your affairs.
Making an application for a Deputyship Order is a time consuming process. If you lose capacity, there is likely to be a period of several months in which no-one can deal with your affairs, while they wait for a Deputy to be appointed. This can put additional financial and emotional pressure on your loved ones during what is already a stressful time.
In contrast, once an LPA is sent to the Office of the Public Guardian (OPG) for registration, it is usually only a month or so before the LPA is registered. The LPA can then be used straight away.
It currently costs £82 to register an LPA at the OPG, plus legal fees, should you seek advice and assistance with the preparation of the LPA.
The Court’s application fee for making a Deputyship application is currently £400. Where a professional (often a solicitor) is appointed, they will charge their own annual fees for acting as Deputy.
Some people worry about the possibility of financial abuse by an attorney. Whilst they are not completely risk free, LPAs have built-in safeguards to minimise the risk. Firstly, your LPA needs to be signed by a ‘certificate provider’, who confirms that you understand the power that you are giving and that you are under no pressure to give it.
You can also name in your LPA people who ought to be notified before the LPA is registered, in case they have any objections.
Remember, the greatest safeguard of all is choosing people you trust completely to act as your attorneys.
You can state in the LPA any preferences or instructions which your attorneys ought to have regard to. For example, you might want your attorney to keep accounts to monitor your finances on a regular basis or dictate the circumstances in which your home can be sold.
Our attorneys can use your Financial Decisions LPA while you still have capacity, with your consent. This can be handy if you are out of the country and need someone to help with your affairs, or if you are physically incapacitated but still have the mental capacity to make your own decisions.
Above all, the benefit of putting LPAs in place now is peace of mind. By making and registering LPAs sooner rather than later, you remove a huge potential headache for your loved ones. You also have the comfort of knowing that, if and when you lose mental capacity, the people you trust will be able to take the reins right away.
This article was first published in Holden and Partners’ newsletter on 6 August 2018.
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