Thinking of one’s own mortality is never easy, but what is perhaps even harder is contemplating falling ill or having an accident and then being unable to look after our own affairs.
It’s a situation that, sadly, many have had to face with Covid-19, one of whom is This Morning presenter Kate Garraway. Her husband, 53-year-old Derek Draper, is still suffering the dire impacts of coronavirus after contracting it in March 2020.
Recently, Kate has highlighted the difficulty she has faced as Derek fell ill without having a Lasting Power of Attorney (LPA) in place. An LPA would have allowed the presenter to look after his financial affairs, helping avoid the “financial mess” she now says she is dealing with.
Read on to discover what an LPA is, and 10 reasons you might need to create one.
Having an LPA allows you to nominate someone you trust to act as your attorney, who then has legal authority to make decisions on your behalf if you lose mental capacity in the future. Generally speaking, “losing mental capacity” means you become unable to make decisions due to impairment.
Alternatively, the attorney can make financial decisions for you if you still have mental capacity, but do not want to.
There are two types of LPA:
Because there was no LPA, Kate explained to the Times that she could not access Derek’s bank or credit card accounts, medical notes or even their joint savings.
Appointing someone that you trust to look after financial or health matters means you are future-proofing your affairs while you have the mental capacity to do so. It’s worth remembering that you can restrict the types of decisions your attorney can make, or you can let them make all decisions on your behalf.
Making sure you have created the LPA means it doesn’t get forgotten about. One common misconception is that you only need to create an LPA when you become ill or can no longer look after your own affairs. This is incorrect – you must create the LPA while you can still demonstrate mental capacity.
If you don’t have an LPA by the time you need one, it’s already too late.
Be careful of delaying too. It can be easy to talk about creating one and then not acting upon the conversation. In an interview with the Times, Kate admitted that she and husband Derek had had a “whole conversation” about creating a LPA in case anything happened.
“So, I know we’ve had that conversation. But it isn’t logged anywhere. Or if it is, I can’t find it,” she added.
This is one of the biggest misunderstandings of an LPA, as creating one does not mean that you immediately lose control of your financial affairs. For as long as you have full mental capacity, you maintain control of your affairs.
You can apply online or request the relevant forms and application pack from the government website.
Once you have the application pack, or decide to apply online, you need to provide the requested information. Taking professional advice from your solicitor or from us as your financial planners is always a good idea.
The LPA must be signed by someone you trust, or you could use a professional attorney such as a solicitor. They will need to confirm that they understand the contents of the LPA and that no one has put you under any pressure to sign.
A good tip is to choose someone who is younger than you and who lives nearby. Having someone of similar age means they, too, may not be of sound mind when you need them to take over or may be too ill to take on the task.
Having someone who lives nearby also means they are better able to look after your affairs and conduct face-to-face meetings if necessary.
Once you have completed the forms, the LPA must be registered with the Office of the Public Guardian before it can be used. A professional legal adviser or your financial planner will be able to help you with this.
If you become incapacitated or lose mental capacity with an LPA in place, the attorney can take over the running of your affairs straight away as long as it is registered.
As Kate Garraway has highlighted, without one your wishes aren’t legally recognised, creating issues for your family as they probably will not be able to deal with your financial affairs.
As she pointed out to the Times, she has been unable to deal with bills and insurance policies as she’s not the named person on the accounts.
Contrary to what you may think, creating an LPA need not be expensive. You can do it for yourself via the government website for £82 per LPA. The process is very straightforward. Alternatively you can seek the help of a legal professional who will charge you for their time but it should not be expensive. If you prefer, we can help you with it for a fixed fee of £250 per person plus the government costs of £82 per LPA.
Before agreeing to use any organisation offering to create an LPA, always speak with your financial planner, who will be able to confirm whether their cost is reasonable or not.
Without an LPA in place, your friends or family will need to decide the most appropriate person to act on your behalf. This person then needs to apply to the Court of Protection to become your Deputy.
This not only means you will not necessarily choose the person looking after your affairs, but the cost can be much higher if you have to go through the Court of Protection.
If there are no objections to the person put forward becoming a deputy, and the Court feels it is appropriate, they will grant the Deputyship.
However, using the Court of Protection can take three months or more, which may result in financial problems in the short term.
Once done, an LPA will provide you with peace of mind as you know that someone you trust will be looking after your affairs in line with your wishes, and you have set out the parameters they will have to use when making decisions.
As your financial planners we will always recommend you create an LPA as soon as possible. Part of our role is to help you to future-proof your lifestyle and wealth, and an LPA can help achieve this.
If you have any questions about creating an LPA or have concerns about your current financial situation you would like to discuss, please contact us below.
This article is for information only. Please do not act solely based on anything you might read in this article.