Make arrangements for old age now
Thursday 27 August 2009
Many people are simply too busy living their lives to consider what will happen to them in the future and, particularly what will happen to them if they become unable to deal with their own affairs.
Consider the all too familiar scenario of an erroneous withdrawal from a bank account or a direct debit continuing to be taken out of an account after it should have stopped. Ordinarily, you would phone the bank and, after being redirected to several different departments and being asked the same question time after time, you would be left with the feeling that the payments may be re-credited to your account.
Now imagine that this has happened to an elderly relative who is frail and hard of hearing. A son or daughter phones the bank on their behalf only to be told that they aren’t the account holder themselves and therefore they are unable to deal with them.
Something this simple can in these circumstances become the most difficult of tasks. Obviously the banks have to protect the account holder from potential fraud . Even greater problems arise where there are other assets which need to be protected.
This can be remedied by appointing an Attorney to act on your behalf under a Lasting Power of Attorney. This is a document whereby a person nominates someone to act on their behalf in the event that they become unable or incapable of doing so themselves. It then allows the person granted that power (known as the attorney) to deal with all such matters on that person’s behalf (they are known as the donor).
A Lasting Power of Attorney must be made whilst the donor still has the capacity to make an informed choice about who they want. It does not however come into force until it is registered with the Office of Public Guardianship. This can be after the donor has lost the capacity to act on their own behalf but can be Registered immediately. This way everybody is clear who is appointed and the power is able to be exercised immediately (rather than awaiting registration).
Lasting Powers of Attorney are often not made until there are some signs that the donor is losing their capacity. This can however create further problems, leading to arguments and litigation about whether a particular family member has put pressure on the donor to name them as their attorney rather than another relative, followed by accusations that they will then use the donor’s accounts for their own benefit. In order to prevent this, it is advisable to nominate an attorney as early as possible so that no such litigation or accusations of undue influence can be advanced.
Lasting Powers of Attorney are lengthy documents and it usually costs about £600 + VAT for one to be prepared correctly and appropriate advice given. The savings that are made by making a Lasting Power of Attorney can be phenomenal.
If a person loses the capacity to nominate an attorney, an application to the Court of Protection is required for the Court to appoint an “Deputy”. This is likely to costs several thousand pounds. Since the deputy is a court appointed official and a personal appointment there is likely to be less control by the person or their family and friends. The costs of appointing a Deputy substantially exceed the cost of making a Lasting Power of Attorney
There are two areas of life where personal decisions may need to be handed over to someone else. These are personal welfare (social, medical and health decisions) and property (houses, cash and assets). As these are two distinct areas there are two distinct Lasting Powers of Attorney. Whilst the same person can be appointed in both capacities you can nominate different persons to act in these two separate areas.
If you have any queries regarding Lasting Powers of Attorney, or any concerns about one already in force, please contact Alex Watkinson at Bell & Buxton Solicitors , Telegraph House, High Street, Sheffield , S1 2GA