In the last piece that I wrote I stressed the importance of you writing a Will, (if you haven’t seen it, click here). Today, I want to talk about an even more important document – your Lasting Powers of Attorney.
You see, I think that your LPA (that’s the shortened version of its name) is more important than your Will because your Will only applies when you are no longer here. If you do not have a Will it makes it more difficult for those that you leave behind but your LPA affects you personally while you are still alive.
What is a Lasting Power of Attorney?
Let’s start with a quick history lesson! Until the Enduring Powers of Attorney Act of 1985 you could appoint an attorney to look after some or all of your financial affairs but that Power of Attorney stopped being valid once you lost your mental capacity.
So, for a relative, spouse or indeed good friend to organise your private affairs, they would need to apply to The Court of Protection to be able to look after your affairs on your behalf. This was a long and expensive legal process which many could not afford. Even worse the process often took up to a year by which time you (known as the “donor”, which is the term used for you in your LPA – equivalent to you being a testator in your Will) may have worsened in mental capacity or possibly passed on.
What’s an Enduring Power of Attorney?
What is the difference between a Lasting Power of Attorney and an Enduring Power of Attorney? The secret is in the title – it ‘endures’ beyond the point that the donor loses capacity. The Mental Capacity Act 2005 introduced the Lasting Power of Attorney and while the EPA only gave the attorney power to help with financial affairs two LPAs were introduced; one for Property and Finance, the other for Health and Welfare. LPAs first started on the 1st October 2007 and from that date there were no more EPAs, though existing ones remain valid. My apologies to those living in Scotland and Northern Ireland where the paperwork is a little different, but the principles remain the same for each jurisdiction
It’s a sad fact that 25% us (that’s one in four) will lose some capacity at some point in our lives. Many of you, like me, will have had personal experience of family or friends whose mental health deteriorates with age. It’s a distressing for us all. This can be made so much easier if you’ve completed and registered your LPAs, which have appointed attorney(s) who can work on your behalf.
At Interface we now have over 13 years’ experience of preparing LPAs for our clients (and another 15 years of preparing EPAs prior to that). While it is always a sad time it gives us a great deal of professional satisfaction when we are asked to provide certified registered copies of LPAs to financial bodies and care organisations. It is also very sad and distressing when we receive enquiries from people who’ve left it too late.
In my last blog I mentioned that as many as 67% of people (that’s two out of three) do not have an up-to-date valid Will but for LPAs the figure is even more shocking! I estimate that nine out of ten people haven’t prepared LPAs, though I am glad to say that for our clients the figure is the other way around and we are working on the remaining 10%.
As in the case of Wills I do not believe that this is because they don’t care (apart from a small minority that probably don’t). We are all daunted by the contemplation of our own mortality and potential decrease in our mental capacity and it is hard to deal with. However, I can guarantee that it is far easier to deal with when you are fit and young than when you are starting to feel the effects of the loss of mental capacity. If you are starting to lose mental capacity, then it may already be too late.
Store your LPA Carefully
In our last blog about Wills we stressed the importance of storing your Wills securely where they can be located at the time of need. You are preparing your Will in order to make it easier for those that you leave behind and you don’t want to add to their stress by them having to search for weeks to find it. The same applies to your Lasting Powers of Attorney. They must be stored in secure place where your attorney(s) know where to find them. We have an arrangement with Countrywide Tax & Trusts who not only provide secure storage, they check that all documents are complete and correct and also scan them. Then, they store digital copies before adding them to their extensive secure document storage. As one of the biggest specialist estate planning companies in the UK you can be confident that your documents will be available when they are needed.
Registering Your LPA
Unlike Wills, which are only registered with the UK Probate Registry after death, your LPAs must be registered with The Office of The Public Guardian (OPG) before they can be used. We always recommend that our clients register their LPAs as soon as they are completed. There is a registration fee of £82 for each LPA, which for a couple with two LPAs each amounts to £328. However we believe that this is a cost well worth paying.
The OPG often take three months or more to complete registration and your attorney could be waiting in limbo, frustrated that they can do nothing. Think of it: you have prepared your LPAs but not registered them: then at the time of need, your attorney has to retrieve your LPAs from storage, find out the process for registering them at the OPG, complete the application forms and send the fee. Then they have to sit back unable to do anything for three months until they are registered! Do you think that they will think kindly upon you for giving them the demanding job of attorney, and then making their life difficult by not registering? It’s frustrating! However…we have something up our sleeve!
Ordinary Power of Attorney
Because of the known delay in registration, we always complete an ordinary Power of Attorney at the same time so that something is in place immediately. If only to stress this point, last week we received a registered LPA from the OPG for a client who died a couple of weeks previously. The OPG had taken almost six months to register the LPA with his attorneys having to endure the stress and frustration!
So – make this another New Year’s Resolution and get your LPA in order!