Lasting Powers of Attorney (LPAs)
Many of you will probably be wondering if Lasting Powers of Attorney, most commonly known as LPAs are worth the money. We see clients day in day out contemplating the very same. And we, like many others, most definitely think they are a good investment regardless of age and we will demonstrate why.
The other question a lot of people ask is whether they even need them. The fact is that you may not need them today but may well need to rely on them in the future. In some ways they are like insurance policies, you may need to claim on the policy or you may not. You don’t know at that particular time when you’re taking out the policy. You do, however, get a sense of relief knowing that you are protected should the worst happen.
None of us know what is round the corner, especially nowadays with the constant threat of terror attacks. I could be left severely incapacitated in a crash or I could lose capacity. Anything could happen and if it does who will look after my finances and make decisions about my welfare? Who will be my voice? My dear husband? No! Regardless of what most of us think, my husband does not have the right to deal with my affairs. Without Lasting Powers of Attorney for Property and Financial Affairs and Health and Welfare he does not have the authority to deal with my finances, let alone make decisions about my care. The only option my husband would have is to apply for a Deputyship Order. This will undoubtedly cause a lot of stress that can be prevented. Not to mention that it will be very costly and time consuming.
In 2003 Heather Bateman had to embark on the long and painful journey of obtaining a Deputyship Order for her dear husband, Michael. He was hit by a car as he crossed a quiet country road which left him in a coma. Saga published Heather’s story and in her own words “The Court of Protection brought me almost as much anger, grief and frustration into my life as the accident itself.” Read the full story here.
Heather was also interviewed by the BBC One Show about her harrowing her experience. Click here to watch it.
Reading Heather’s story makes me realise that I still have time to save my dear husband from all this pain and stress. You too still have time to make LPAs and save your loved ones from all this hassle. They can also save you thousands of pounds in the long run.
The Two Types of Lasting Powers of Attorney
I briefly mentioned earlier that there are two types of Lasting Powers of Attorney. Both LPAs allow your attorney’s (these are the trusted people you have appointed to act on your behalf) to make different decisions on your behalf. We will look at both here in a bit more detail.
Lasting Power of Attorney for Property and Financial Affairs
This LPA will give your attorneys the authority to deal with the following on your behalf:
- Open, operate and close your bank accounts;
- Claim and receive moneys on the your behalf;
- Deal with your tax affairs;
- Pay your household expenses;
- Buy, lease or sell your property;
- Pay for your private medical care and care home costs;
- Make gifts on your behalf;
- Purchase cars & equipment on your behalf for your benefit;
- Implement tax planning and pension arrangements;
- Make decisions about running your business (separate LPA needed)
Your attorneys can act under this LPA once it has been registered with the Office of the Public Guardian.
If you are a business owner then you should have an LPA for Property and Financial affairs for your personal affairs and a separate one for your business. This will allow you to appoint different attorneys for the business. People you trust and ideally who know your business inside out and can run it on your behalf when you are unable to.
Lasting Power of Attorney for Health and Welfare
A Lasting Power of Attorney for Health and Welfare allows your Attorney to make the following decisions:
- Decide where your place of residence shall be;
- Decide on what care and accommodation you require;
- Consent to any medical treatment, procedure or therapy or refuse consent;
- Make decisions about your dress, diet and personal appearance;
- Decide on your social activities;
- Arrange for you to undertake work, education or training;
- Take you on holiday or authorise someone else to do so;
- Make decisions on your behalf about life sustaining treatment, if your LPA gives your attorneys the authority to do so.
Your appointed attorneys under this LPA can only step in when you have lost mental capacity and can no longer make decisions for yourself.
An LPA for Health and Welfare gives your attorneys the right to challenge care fees on your behalf when you are unable to do so yourself. Without this your loved ones can’t challenge the fees.
You have the option to register the LPAs immediately or when you lose capacity. We strongly recommend that you register your LPAs immediately as it may be too late otherwise.
Protection from Attorneys
One question we get asked a lot when it comes to Lasting Powers of Attorney is what happens if your attorneys abuse their powers. I am sure the same question has crossed your mind as well. Your attorney has a legal duty to act in your best interests and they acknowledge this when they sign the relevant section of your LPAs. If your attorney fails to act in your best interests then it is possible to bring a criminal charge against him or her.
You should choose your attorneys wisely. Make sure they are people you know and trust and will do right by you.
Enduring Power of Attorney
Lasting Powers of Attorney replaced Enduring Powers of Attorney (EPA) in October 2017. However, if you made an EPA before the 1st October 2017 then fear not, it is still valid.
When you lose capacity your attorneys must register the EPA with the Office of the Public Guardian in order to be able to make decisions on your behalf. An attorney appointed under an EPA can only make decisions on your behalf in relation your property and financial affairs. The EPA does not give them the authority to make decisions about your health and welfare. It would be advisable to make a LPA for Health and Welfare if you haven’t already done so.
Power of Attorney
Unlike a Lasting Power of Attorney a Power of Attorney does not have to be registered with the Office of the Public Guardian. It is available to use immediately once you have signed it in the presence of a witness. It allows you to appoint people you trust to act on your behalf regarding your financial matters only.
This type of Power of Attorney can be general or you can limit it for a specific purpose. Such as allowing your attorney to sell your house whilst you are on holiday, in hospital or working abroad. It is normally used on a temporary basis.
Your attorneys can no longer use the General Power of Attorney when you have lost capacity. It becomes invalid at that stage.
The cost of Lasting Powers of Attorney v the cost of a Deputyship Order
The cost of a LPA usually varies from firm to firm and are in the region of £500.00 for one. Most firms will offer a discount on a second LPA if you decide to make both types and a package deal for a couple wanting to make both each (four in total). In addition to the firm’s charge there is the Office of the Public Guardians registration fee of £82 per LPA. You may be able to apply for a reduced fee of £41 or exemption if you receive certain benefits or have low income. The thing to remember here is that this is a one off fee. There are no annual recurring fees.
By contrast, the Court of Protection fees to obtain a Deputyship Order are more expensive. The process is also very time consuming as we have already seen. Here is a breakdown of the fees to obtain a Deputyship Order:
- Deputyship Order for Property and Financial affairs – £400;
- Deputyship Order for Health and Welfare – £400;
- Your deputy will need to pay £500 if Court of Protection decides your case needs a hearing;
- There is also an annual supervision fee:
- £320 for general supervision;
- £35 for minimal supervision (where managing less than £21,000);
- Your deputy must pay a £100 assessment fee if he or she is a new deputy;
- The deputy must also pay a bond before he or she can start acting. This is a type of insurance that protects the finances of the person he or she is a deputy for i.e. you.
- Your deputy will also incur additional legal costs – such as a solicitor’s fee to prepare the Deputyship Order application. Most solicitors will charge an hourly rate. It can take several hours to prepare the application and deal with the on-going work.
These are the current fees and you can read more about them on the government’s website by clicking here.
To put this into perspective, let’s look at what Heather Bateman’s paid:
- A commencement fee: £240
- Appointment fee: £315
- Administration fees: £190-£240
- Account fee: £100
- Various transaction fees: £60-£540
- Winding up fees: £290
- The total is between £1,195-£1,725 and her accountant’s fees plus there would have been ongoing yearly fees.
This is quite expensive when compared to our fee of just £540 (inclusive of VAT) to prepare one LPA. Contact us today to find out more about the packages we offer, the costs and our unique payment plan to ease the financial pressure by spreading the cost over 12 months.
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