AN LPA ALLOWS ACCESS IF A LOVED ONE LOSES MENTAL CAPACITY
Kate was unable to access her own money
GOOD Morning Britain presenter Kate Garraway has been through a year of hell since husband Derek Draper fell into a coma after catching Covid-19, and money worries have only added to the strain.
The couple’s car, insurance, credit cards and several bank accounts were solely in Derek’s name, which has left Kate unable to access the money or refinance their mortgage.
Every year, thousands of families find themselves in a similar position when a loved one suffers from Alzheimer’s or dementia, has a serious accident or illness, or is struck down by Covid.
Once banks discover a customer has lost mental capacity, they will freeze their accounts to protect their interests, locking out their loved ones.
The best way to avoid this nightmare is to set up a legal document called a Lasting Power of Attorney (LPA). The catch is that you have to take one out before you lose mental capacity. Afterwards, it’s too late.
What happens if a loved one loses capacity?
Most people assume they can step in and manage their loved one’s finances in an emergency, but Andrew Morris at later life advisers Age Partnership says this isn’t the case.
“You can’t just take charge of their money, even if you are married, in a civil partnership or are next of kin.”
The aim is to protect the account holder but it can leave family members unable to withdraw money, settle bills or manage pensions.
This is exactly what happened to Kate. She cannot access Derek’s accounts even though they have been married since 2005 and have two children, 15 -year-old daughter Darcey and 11-year-old son Billy.
Even setting up a joint bank account does not help, as the bank may still freeze activity to protect the other account holder, Morris says.
By setting up an LPA today, you can spare your family a lot of distress at a difficult time.
What is an LPA?
to manage your financial and health affairs while you are still alive, but unable to cope yourself.
While 44% of adults have a will, only 12 per cent have an LPA, according to research from Solicitors for the Elderly (SFE).
People are slowly waking up to their value, registering more than 800,000 every year, according to the Office of the Public Guardian (OPG).
Nobody likes to think about losing mental capacity but Morris says: “Facing up to it now could save a lot of upset later.”
VALUABLE both types of LPA
An LPA is a legal document that lets you appoint one or more family members or friends
How does the LPA work?
There are two types of LPA. One allows the attorney to manage your property and financial affairs, including bank accounts, state benefits, tax affairs, bills and so on.
The other covers your health and welfare, allowing your attorney to sort out medical matters such as where you should live, and what care and treatment you need.
Morris says, “More unusual requests include having a brandy before bed, regular haircuts and manicures, and time outside in the fresh air.” Sally Cable from Harrogate set up both types of LPA last year. “I’d done one for my mum so was aware how important they were.” Sally, 61, used the health and welfare LPA to state that she didn’t want life sustaining treatment if there is no hope of recovery. “And I don’t want to move into residential care unless there is no alternative.”
Sally also made a very personal request in the dietary requirements section. “Under no circumstances should I be fed scrambled eggs. I detest them and this was my chance to document it.”
How do I set one up?
It costs £82 to register an LPA in England and Wales, £81 in Scotland and £151 in Northern Ireland. This is per LPA so you will pay double if you set up both types, although those on low incomes get a discount.
If you use a solicitor you will also have to pay their legal fees, although it is possible to set one up yourself.
The pandemic has focused minds and the SFE’s Find a Lawyer helpline has seen a surge in calls about later life legal advice.
Chair Michael Culver says it shouldn’t be put off: “It is all too easy to think it won’t happen to me or that you will have plenty of time to sort these things out later.”
What if I don’t have one?
If you fall ill or lose capacity and don’t have an LPA, your family will have to apply to the Court of Protection to access your bank accounts and manage your affairs.
This is a lengthy and costly process, and the courts ultimately decide who to appoint as deputy, Morris says.
“This could even be the local authority or family members you may not wish to be involved. By contrast, an LPA hands instant power to the people you trust.”
Court-appointed deputies also have restricted powers, must maintain annual reports and pay annual fees.
People are waking up to the value of an LPA with 800,000 taken out each year
Can young people set one up, too?
While the average age for setting up an LPA is 74, much younger people should consider them as well, says James Antoniou, head of wills at Co-op Legal Services. “Accidents and illness can strike at any time, even in your 20s, 30s or 40s.”
An LPA is particularly important if you are the main breadwinner or family savings are held in your name.
“Imagine if you were in a coma and your spouse was unable to access your bank account to pay the mortgage or for specialist care. This is a very real possibility if you don’t have an LPA.”
The attorney can manage property, tax, bank accounts and your health welfare
What other benefits does it offer?
An LPA can also protect you from the growing menace of fraud, as scammers target elderly people isolating at home, says Philip Collins, partner at law firm Winckworth Sherwood.
“An LPA lets loved ones monitor and manage bank accounts to pay bills and