A recent study undertaken by Scottish Widows claims that although 95% of UK adults are aware of what a Lasting Power of Attorney is, a third of them don’t know how it’s used.
More worryingly, of those who are aware, only half of them had put Power of Attorney in place. This could potentially leave millions at risk of losing control of their spouse’s finances.
The study goes on to say that only just 41% of married couples currently have the document in place. This is in sharp contrast to the 76% of people in a relationship who have discussed Wills and Trusts with their partner.
One could read these statistics as a suggestion that many married couples might think power of attorney is unnecessary. Or it could be that as they are married, they believe they’d automatically assume legal responsibility for making crucial financial and wellbeing decisions on behalf of their partner should they lose mental capacity.
This is definitely not the case.
If Lasting Power of Attorney (LPA) is not in place, you may find that you are prevented from making key decisions. This could result in you being unable to access certain aspects of your finances or blocked from doing what you’d like to with certain assets.
For example, if you own your home jointly with your partner, as the owner with capacity you would not be able to sell your home so that you can, for example, downsize to fund care without your partner who has lost capacity being a party to the sale.
Similarly, if your bank accounts are held jointly and your partner loses capacity, the bank is able to decide whether they will allow you to continue using the account or temporarily restrict its use to essential transactions (e.g. living expenses, care bills etc.) until an LPA has been put in place.
Many people confuse a Lasting Power of Attorney with a Will or assume that because they have a Will, they automatically have Power of Attorney. However, a Will and Power of Attorney couldn’t be more different.
While a Will protects your beneficiaries’ interests after you’ve died, an LPA protects your interests while you’re still alive. As soon as you die, Power of Attorney ends and your Will takes over.
Sometimes one spouse or partner will lose capacity to make the most important decisions. A Lasting Power of Attorney gives the legal responsibility for making these decisions to someone you trust. This person could be your husband, wife or partner or another family member or close friend. It just has to be someone you know will make the best decisions in your best interests should you be unable to.
Although in many cases Power of Attorney never has to be used, it is an essential document for any person or any couple who has money and assets to protect.
There are two types of Lasting Powers of Attorney. The first relates to your property and financial affairs. The second relates to your health and welfare. In almost every case the best idea is to have both a Property & Financial Affairs and a Health & Welfare Power of Attorney in place.
Setting up or – to use legal terminology – making a Lasting Power of Attorney is very straightforward. You can ask a lawyer to help you, or you can do it yourself online. However, given the finances, assets and future security at stake, it is best to instruct a specialist and regulated private client lawyer because one mistake could leave you in as vulnerable position as you would be in without Power of Attorney.
Going through a lawyer also provides an additional layer of reassurance. If you and/or your partner become incapacitated for whatever reason in the future, your lawyer will be able to immediately on act your behalf and in your best interests.
If you’re still in any doubt as to why you need an LPA, please ask yourself these questions.
Would you be comfortable with a complete stranger making vital decisions about your money, your home and your health while your family watches on powerless to help?
Would you feel more secure knowing your family had the power to fight to make sure you received the very best care from the NHS or your local authority if your health was to take a turn for the worst?
Where would you be if your most trusted relative or friend wasn’t able to access your bank account to access the funds you need to pay your bills, shop for food or pay for the specialist care you need?
These are exactly the types of circumstances an LPA is designed to help you navigate, safely, securely and with total peace of mind.