Reflections: Powers of Attorney

Share This Post

Share on facebook
Share on linkedin
Share on twitter
Share on email

We’re huge advocates for every adult to have Lasting Powers of Attorney covering their property and finances and their health and welfare. Whilst we’re competent to discuss the need, we won’t formally advise upon them, nor prepare them for our clients, preferring instead to redirect clients to a trusted solicitor.

We were delighted to note last week (17th July) that the Office of the Public Guardian released it’s new digitised Lasting Power of Attorney process which replaces the chunky paper-based system and dramatically speeds up processes for those acting (the Attorney) on behalf of friend or relative.

The new digital system allows those acting as attorney to provide a secure code via the new online portal which will instantaneously confirm their status as an attorney and the powers they hold. The Office of the Public Guardian confirms that the new system preserves the existing checks to protect the vulnerable and elderly from abuse.

Data from the Ministry of Justice, published earlier this month, showed 239,647 powers of attorney were received in January to March 2020 — up 5 per cent from the same quarter last year. Anecdotal evidence from friendly solicitors leads us to suspect the figures for the second quarter of 2020 will be significantly higher with a dramatic COVID boost.

Whilst most people understand the need for their friends or family to be able to administer their affairs in the event of the loss of mental competence. It is important to stress that in the absence of Lasting Powers of Attorney, friends and family face long delays and an onerous application to the Court of Protection to gain access to their finances and make decisions on their behalf.

During this process, assets are likely to be frozen, including joint assets, and this can cause significant problems and financial distress for relatives who may need to make arrangements to pay bills or for any ongoing care needs.

We’ve been reflecting how the coronavirus has highlighted the importance of Lasting Powers of Attorney in situations beyond the often presumed ‘loss of mental capacity’.

Business decisions

We’ve seen some business owners run into problems over recent months as isolation keeps them away from their business. They could create separate LPAs for their business interests allowing them to appoint specific attorneys to look after their business affairs. This prevents personal attorneys exposing both themselves, and the business in question, to unnecessary risks.

Health & Welfare decisions

A Health & Welfare Lasting Power of Attorney is a broad-ranging document which can confer a wide range of powers on our appointed personal representatives. We can empower our friends or family to make a decision anything from rather mundane treatments, through to big decisions about appropriate care settings (is that care home 80 miles away suitable?) and, if you choose, the authority to request the withdrawal of life-sustaining treatment on your behalf. COVID has highlighted rather dramatically how a temporary loss of mental competence (ie whilst sedated) is just important to consider as a permanent loss of mental competence through degenerative disease etc.

Shielding decisions

We’ve seen the problems shielding causes up close, with various members of our team needing to shield personally or to be shielded because of very vulnerable family members. Those of us not subject to shielding have struggled to perform routine financial tasks, as a business, we have some enquiries with big financial providers which have been outstanding for over three months. But, what is you’re shielding and you can’t or won’t conduct your affairs online? By having a Lasting Power of Attorney in place we’ve seen shielding clients be able to have their nominated friend or family member(s) act on their behalf, stand in front of bank staff and liaise with service providers.

Stuck away from home

As the UK went into lockdown we had some stranded souls; we know of one client stranded in the Far East and two clients stranded in the Middle East. Closer to home, a member of our team found himself ‘’under house-arrest’’ in a Canary island hotel. Whilst we’ll hopefully avoid another national lockdown, the risk of local lockdowns can leave people equally isolated and stuck away from home and it seems equally likely that air-bridges will be open one day, but closed the next. A Lasting Power of Attorney will never ease the inconvenience and potential fear of being stuck away from home, but at least it means that your business interests and financial affairs can be managed whilst your unable to administer your affairs so you’ve one less thing to worry about.

What is a general Power of Attorney?

A general Power of Attorney is a legal document in which we give the right to make decisions on another person[s] on our behalf. You can only set up a Power of Attorney while you still can weigh up information and make decisions for yourself, known as ‘mental capacity’. Often a general Power of Attorney is valid for a very specific period or grants power to make decisions over specific aspects of our affairs. More rarely, the Power of Attorney covers all of our assets until the earlier of revocation, loss of mental competence or death

What is an Enduring Power of Attorney?

An enduring power of attorney (EPA) is a legal authorisation to act on someone else’s behalf in legal and financial matters which (unlike a general power of attorney) can continue in force after the person granting it loses mental capacity, and so can be used to manage the affairs of people who have lost the ability to deal with their affairs, without the need to apply to the Court of Protection. Existing Enduring Powers of Attorney remain valid, but it has not been possible to create a new enduring power of attorney since 2007 when the much more comprehensive Lasting Powers of Attorney became available. It is important to note that an Enduring Power of Attorney unless specifically annotated to the contrary, grants only limited power for your representatives to deal with your financial affairs and does not allow your representatives to make decisions about your care or welfare.

What is a Lasting Power of Attorney?

A lasting power of attorney [LPA] allows someone, while they still have full mental capacity, to nominate a trusted friend[s] or relative[s] to make decisions on their behalf in cases of lost mental capacity. ‘Financial and property’ Lasting Powers of Attorney give the power to your nominated friend[s] and/or family to pay your bills and handle your financial decisions, while the power to make medical decisions and potential life-sustaining treatments for you are within ‘health and welfare’ LPAs.

What next?

Please get in touch if you have any queries as a result of this article. We’re always happy to talk but remember, we do NOT prepare Lasting Powers of Attorney and always recommend a trusted, competent solicitor to provide any formal advice about such matters. As with a will, it’s invariably too late when someone discovers such an important legal document is not compatible with your wishes.

The Financial Conduct Authority does not regulate trust, wills and lasting powers of attorney.

 

More To Explore:

Cashflow Modelling

What is cashflow planning?

What is cashflow planning? Cashflow planning is the process of looking at your current financial situation and planning ahead for the future. So whether you’re

News

Happy New Tax Year!

Today, 6th April marks the beginning of the new tax year and a brand new 365 days of tax planning opportunities! But why the 6th

Notices:

Our posts are intended as financial education and financial information, not as financial advice, and are only suitable for UK residents. Always take professional, independent advice before acting on any information.

Investment & Retirement Solutions Ltd is authorised & regulated by the Financial Conduct Authority.

The value of investments and income from them can fluctuate (this may partially be the result of exchange rate fluctuations) and investors may get back less than the amount invested. Past performance is not a guide to future performance.

Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.

The Financial Conduct Authority does not regulate taxation and trust advice, will writing, advice on deposit accounts, some types of offshore investment, some aspects of buy to let mortgages, commercial finance or offshore mortgages.

Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor. Unless specifically stated otherwise, our posts do not allow for the additional taxation powers which may be levied by the devolved governments.

All information is offered in good faith and is believed to be correct at the time of publication however it may be superseded following publication. E. & O. E.

Would you like to know more?

drop us a line, it's good to talk

Skip to content