Sadly, the number of people with dementia continues to rise. According to figures from Alzheimer’s Society, there are currently 850,000 people with dementia in the UK, with a further 225,000 predicted to develop dementia this year, that’s one new diagnosis every three minutes.
Thinking about the possibility that this devastating condition might affect us or a loved one is at best difficult, but talking about it and planning for the future is, in fact, a positive step that will help you prepare for whatever lies ahead, as well as longer term, help to ease the worry, burden and stress for family and friends.
What you can do
As well as having a will, and of course keeping this up to date if your circumstances change, it is sensible to have a Lasting Power of Attorney (LPA).
A power of attorney is a legal document which allows you to give another person (your attorney) authority to make decisions on your behalf.
What are the consequences of not having an LPA?
Not having an LPA is in many ways, leaving things to chance. Michael Brook, a solicitor in Lodders’ top ranking Private Client team explains the benefits of having an LPA, and what could happen if you don’t.
- Next of kin: Being ‘next of kin’ does not give you an absolute right to manage someone’s finances or make decisions for them when they have lost capacity, nor does it provide the individual with any legal standing.
- Family ties: A family member may presume – often with the best intentions – that they will have a ‘right’ to deal with the affairs of someone they love. This is particularly common for spouses and / or civil partners, but in reality, they will only generally be able to deal with joint assets, and indeed even some of these accounts can be restricted when one of the joint owners loses capacity.
- Uncertainty: Without a properly drafted LPA, there may be a period of limbo until a deputy can be appointed by the Court of Protection, a timeframe which for a business can have a real impact on day-to-day operations, or the payments of bills and debts.
- Deputies: A ‘deputyship’ is the process of appointing a chosen individual to manage someone’s affairs where there is no form of Power of Attorney in place in the event that the person in question has lost capacity. The deputyship route, however, is more costly and time consuming, plus it has an ongoing costs and obligations on the deputy when compared to an LPA. These include payment of an annual bond and annual reporting to the Office of the Public Guardian.
- In addition, a deputy may not always be the person who the individual that has lost capacity would want to manage their affairs. The person lacking capacity may have no say in whom the Court appoints as deputy. By putting LPAs in place, whilst you still have capacity, you get to choose your attorneys and what powers they have.
- Plan ahead: Often it is too late when someone is diagnosed with dementia to put an LPA in place, it is therefore vital to be proactive and to create LPAs at an early age, and encourage all family members to have this important safeguard in place.
Age is irrelevant for adults
An LPA is a key tool for managing the loss of capacity and it is important to remember that capacity can be lost as the result of a number of sudden situations and tragedies, including car accidents or brain injuries. An LPA is not solely a tool for those heading towards old age.
What are LPAs?
Prior to the Mental Capacity Act 2005, which was enacted in October 2007, you could prepare an Enduring Power of Attorney (EPA). Since 1st October 2007, it has not been possible to prepare a new EPA and so if you wish to appoint an attorney to make decisions on your behalf, you need to prepare a new type of power of attorney – an LPA. There are two types of LPA, one in respect of property and financial affairs and one in respect of health and welfare decisions.
Property and financial affairs LPAs
This type of LPA works in a similar way to an EPA, as it allows your attorney to deal with any property interest and finances. It is a flexible document that may be used (depending upon your wishes) both when you have the capacity to manage your affairs and in the event that you lose mental capacity. For your attorney to use this power on your behalf, the LPA needs to be registered with the Office of the Public Guardian.
Health and welfare LPAs
This type of power of attorney was introduced for the first time in 2007. It allows your attorney to make welfare and health care decisions on your behalf, if you lack the mental capacity to make these decisions yourself. This LPA can only be used if you lack mental capacity, it also needs to be registered with the Office of the Public Guardian.
For more information, please contact Sofia Tayton, Jessica Beddows, or Michael Brook .