Why is important to have a Power of Attorney? If someone becomes unable to make decisions for themselves in the future, someone will need to make decisions for them. Who does this will depend on the situation.
While Covid-19 persists, it is more important than ever that we prepare for all eventualities, engaging in what certainty we can to protect ourselves, our wishes and our families.
When dealing with so many pressing concerns, it may be easy to overlook the need for basic, up-to-date legal documents like a financial power of attorney. But this important document could be critical if events—from the challenges of quarantine to the blow of serious illness—leaves someone unable to handle financial matters.
Powers of Attorney are a good way to provide a trustworthy person with the power to carry out tasks which someone would ordinarily do but are unable to – for example, due to self-isolation, confinement or simply because of the anxiety associated with venturing out in public at this time.
Types of Power of Attorney
Generally, medical and other professionals will make decisions about health and social care, and family members or carers will decide on day-to-day matters.
But someone trusted can officially be appointed to make those decisions. This is called making a power of attorney (LPA), and enables you to give another person the right to make decisions about your care and welfare. You can also appoint an attorney to decide on financial and property matters.
Ordinary Power of Attorney
If your parents are still of sound mind but want to give you or someone they trust the authority to make decisions about their finances they can set up an Ordinary Power of Attorney.
It is only valid while they have the mental capacity to make their own decisions about their finances. The power given can be limited so that the attorney only deals with certain assets, for example, a bank account, but not their home.
It may be useful to set up an Ordinary Power of Attorney if your parent is going into hospital and they want someone to deal with their bank account while there. It does not need to be registered before being used.
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Lasting Power of Attorney
A Lasting Power of Attorney (LPA) continues to be valid if your parent loses their mental capacity and is no longer able to make their own decisions. It is a good way for your parents to give someone they trust the legal authority to make decisions when they are no longer able to do so themselves.
There are two types of LPA:
Property and Financial Affairs LPA to cover decisions including: selling a home, paying the mortgage, investing money paying bills and arranging repairs to the property.
Personal Welfare LPA covers healthcare and personal welfare and covers decisions including: where your parents should live, their medical care, what they should eat, who they should have contact with and what kind of social activities they should take part in.
An LPA is only valid if your parents have the mental capacity to set it up and haven’t been put under any pressure to create it. The LPA must be signed by a certificate provider, someone they know such as a doctor, social worker or solicitor and it can only be used once it is registered with the Office of the Public Guardian.
Setting up an LPA
Forms are available from the Office of the Public Guardian, or organisations such as Which?Guide to Elderly Care. The cost ranges from £49 for a self-service option upto £139 for a LPA. Upto 50% discount is available for those on low incomes and free for anyone receiving certain benefits. The registration process takes about 9 weeks and the LPA can’t be used until it is registered.
The Court of Protection
If someone is mentally incapable of making a particular decision at a particular time, and they haven’t made an LPA, and the decision isn’t one that can be made on an informal basis, the matter can be referred to the Court of Protection. The court may either choose to make the decision itself on the person’s behalf, or choose someone else, known as a “deputy”, to make the decision for them.
Where the court appoints a deputy to manage someone’s financial and property affairs on an ongoing basis, the deputy usually has to keep accounts, enter into a security bond, and report to the Office of the Public Guardian. The Court of Protection charges an application fee, and the Office of the Public Guardian charges a yearly fee to cover the cost of supervising the deputy’s work.
If a person is incapacitated and entitled to receive a retirement pension or other state benefits, the Department for Work and Pensions can choose an “appointee” to receive those benefits on that person’s behalf. The appointee can be a relative, friend or someone from the caring profession such as a social worker. They will be asked to produce some proof that the claimant is incapacitated, such as a doctor’s certificate. There is no fee involved in this service.
Sources of more information:
- The NHS has information on Powers of Attorney here
- Which? Guide to Elderly Care
- Age UK
- Citizens Advice Bureau
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