24 / 08 / 21
No matter your age, it’s the right time to swot up on lasting power of attorney
Imagine the shock of arriving home one day to find the door key or entry code to the home you’ve lived in for a lifetime suddenly doesn’t work, and then everybody you call from family to locksmith says they can’t help you.
Being shut out of everything you know, and everything to which you had access, days, hours or even minutes before is frustrating at best, a horror movie script at worst.
Door locks are highly visible. But security and privacy rules meaning you can be completely shut out of access to every household financial or healthcare tool or decision are not.
And being denied access on any level is what can happen if your partner or family member is suddenly incapacitated – banks, credit card providers, even phone or TV subscription call centres can suddenly refuse to discuss even emergency needs if your partner hasn’t given you express written permission to speak on their behalf.
It’s a robust and intransigent trait of today’s privacy and access laws.
Married couples, for instance, even those who are relatively young, probably never consider circumstances where they would need to access each other’s bank accounts in a situation where one of them was unable to make financial decisions.
Many assume if something did happen to them, and they couldn’t make financial decisions, a family or friends would automatically be allowed to make decisions on their behalf.
That may have been the case in generations gone by, but modern privacy, security and access rules, regulations and laws mean that has long since been outlawed.
The answer is to make a Lasting Power of Attorney (LPA). There are two types of LPA, a Lasting Power of Attorney for Property and Financial Affairs, and a Lasting Power of Attorney for Health and Wellbeing, allow the appointment of someone, or several people, under legal authority, to help make decisions or make decisions on your behalf, if for whatever reason you are unable to, for instance if you are incapacitated by illness or injury.
We’ll deal here with an LPA for property and financial affairs. Without an LPA, nobody else can access bank accounts that are in somebody else’s sole name. It’s only when you find you can’t do something you’ve been doing without thinking for years that you discover how crippling this can be to household finances, for instance, to cancel direct debits or standing orders, or move money between accounts. Even pay bills.
It also means that no one can set up a direct debit or standing order from your bank account either, which could be an issue if you somebody was going into a care home setting and care needed to be paid for – in extreme circumstances even meaning that a local authority can take control of the assets and finances of an incapacitated person, even to the extent of selling their home to cover care fees.
Justine Clowes, Partner at law firm SAS Daniels explains: “There can also be issues when dealing with utility companies, or subscription services like Sky or BT, if the account is in the name of the incapacitated person.
“Without an LPA in place, no one else can make changes to the account. Similarly, if you have money in investments, they will not be accessible, and no changes can be made without an LPA. This could cause a huge amount of additional stress for a loved one already facing a distressing time.
“It’s a common misconception that LPAs are only for the elderly, or for people who have lost capacity. In fact, regardless of a person’s health now, everyone should consider making an LPA to help them prepare for the unexpected.
“They act as a safety net, should circumstances arise where you cannot make decisions for yourself. Even if the change to your capacity is temporary, having a trusted person already appointed to make decisions on your behalf could prevent a whole host of issues further down the line.”
In cases where an LPA for property and finance is not in place, she adds, it may be possible to apply to the Court of Protection to be an appointed Deputy. However, this can prove to be a far more costly and lengthy process.
If you were to find yourself unable to make decisions, without an LPA in place, there can be far reaching financial consequences.
“They are simple to register and no matter what your age, or health, nobody knows what is around in the corner. A Lasting Power of Attorney is a simple way to give you and your family peace of mind.”