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Why you need to make a Lasting Power of Attorney

26th March 2019

Why Choose Lasting Powers of Attorney?

Setting up lasting powers of attorney is one of those things most people have heard of and typically consider a good thing, but like writing a will, they tend to put it off for as long as possible or ignore completely. On an emotional level it is not hard to see why. Drawing up documents that give someone else the power to look after personal matters like your finances, property, health and general welfare, should you lose the capacity to do so, involves facing up to your own mortality.

However, should you lose capacity without having first set up lasting powers of attorney, the alternative is a deputyship order, which has to be applied for on your behalf and is more complex in several important ways.

Lasting Powers of Attorney

Once you are over 18 and still have full mental capacity, you have the right to set up lasting powers of attorney. The choice of word is confusing, because most people hear the word attorney and immediately think of legal professionals and in this case a legal qualification is not required.

The attorney you choose has to be over 18 years of age and if they are bankrupt or subject to a Debt Relief Order, they will not have the right to act as an attorney dealing with property and financial affairs.

The choice is entirely personal and should be made on the basis of whether you trust the person, whether they demonstrate competence when it comes to arranging their own affairs and if they are happy and willing to act as your attorney.

You might opt to appoint more than one attorney or a replacement attorney should your attorney be unable to act in the future.

The process of setting up lasting powers of attorney is as simple as filling in the relevant forms, online or on paper, getting them signed by the attorneys, witnesses and a ‘certificate provider’ and then registering the forms with the Office of the Public Guardian (OPG).

Currently there is a Court fee for registering a health and welfare power of attorney and a property and financial affairs power of attorney of £82 for each time you draw them up.

Powers of attorney of this kind are set up while you have full mental capacity and should be designed to suit your wishes and requirements exactly, offering peace of mind if the worst should happen.

Deputyship is the alternative

If you lose mental capacity without having a lasting power of attorney in place, then it is too late to set about having one.

The alternative is a deputyship order, which involves an individual applying to the Court of Protection to be appointed as your deputy. One major difference between the two is that the process of applying for deputyship can take as long as 6 months.

Then, once the application has been made close family members have to be notified of its’ existence and given the time to lodge with the court any objections they have.

When compared to the ‘ready-made’ nature of powers of attorney, this kind of delay has the potential to cause problems, not just emotionally, but financially, particularly if there is a delay accessing the funds needed to pay for medical or care fees.

Considering the delay between any loss of capacity and the order taking force, along with the fact that you personally have no control over the process, the other major issue with a deputyship order is that it is much more expensive to arrange than powers of attorney.

The costs involved include court fees of £385 per order, associated legal fees, the cost of getting a doctor to fill in form COP3, which confirms a loss of capacity and can cost between £50 and £300, all topped with an annual supervision fee of £325.

A deputy is also required to pay an annual ‘security bond’ which is a form of insurance to protect the subject of the deputyship from mismanagement of their funds. The size of this bond will vary depending upon the size of the estate being managed.

A final issue to bear in mind is that the Court of Protection only appoints deputies for health and welfare very occasionally, as opposed to those responsible for property and financial affairs. The deputyship process includes more safeguards, largely because the deputy won’t be a person you’ve chosen yourself.

The temptation to wait until deputyship is needed and leave the matter for others to resolve, rather than acting with foresight may be strong, but the peace of mind offered by a lasting power of attorney should more than outweigh these natural yet unhelpful feelings.

We have an experienced private client team, ready to guide you through the process of setting up powers of attorney for you and your family. If you would like to discuss any matters raised in this article, please call Adam Penn direct on 01543 431196 or email him at apenn@ansonssolicitors.com