Article by Sarah Pennells
Who would sort out your financial affairs if you or a family member had a serious accident or became too ill to cope? Are you someone who likes to plan or do you prefer to leave it all until the last minute? If you’re a planner, you probably have savings, a pension, even a will; but have you planned for what would happen if you couldn’t make decisions about your own money? No? I didn’t think so!
Figures show that while only one in three adults has made a will far fewer have made arrangements in case they can’t make their own financial decisions. But without a legal document, it would be down to a court (set up by the government) to decide who should run your finances.
Recently the Court of Protection was criticised for ‘seizing’ billions of pounds of people’s money who had been deemed as incapable of making their own decisions and while there certainly are problems with the court’s administration, by far the bigger issue is the fact that most people don’t think about this issue until it’s too late.
Protecting yourself and your family
If you, or family members want to make sure that you get to choose who makes decisions for you, you will need to draw up a Lasting Power of Attorney (LPA) (unless you already have an enduring power of attorney which was in place before the law changed in 2007). There are two different types:
How much does it cost?
If you use a lawyer, LPA’s aren’t cheap (they cost a minimum of £150 for each one, although your bill could run to hundreds of pounds) and while you can draw up an LPA yourself (there’s information on the Office of the Public Guardian website about how to do this) be aware that the forms run to dozens of pages. Lawyers who are members of http://www.solicitorsfortheelderly.com/public/index.php Solicitors for the Elderly specialise in this area.
Who should I appoint to look after my affairs?
You’ll have to appoint several people when you take out an LPA. They include:
- Attorneys: They will make decisions for you. Who you appoint is up to you, but it should be someone you trust and someone who you think would be able to cope with the administration. Appoint more than one attorney (for example, your husband or partner plus one or more of your children). Useful to know: If you appoint your attorneys jointly, they’ll have to agree to every decision together so it’s a better idea to appoint them ‘jointly and severally’, so they can make decisions individually.
- ‘Person to be told’: You can choose up to five people who will be informed once the LPA is registered with the Office of the Public Guardian (which has to be done before it can be used). It’s a safety measure to stop someone you’ve appointed from taking control of your affairs without anyone knowing about it.
- Certificate provider: You’ll also have to appoint a certificate provider, who is normally either the lawyer drawing up the LPA or your GP. They’re there to check that you know what you’re doing and that you haven’t been pressured into drawing up the LPA. Useful to know: If you don’t choose a ‘person to be told’, you’ll have to appoint a second certificate provider.
What happens if I don’t have an LPA?
If you don’t have an LPA, your relatives would have to apply to the Court of Protection for a ‘deputy’ to be appointed to manage your financial affairs. Apart from the fact that most of us wouldn’t want someone appointed by a court to sort out our finances, the costs can be pretty expensive.