have you considered the risks if you lose mental capacity?
An LPA (Lasting Power of Attorney) is a legal document that allows you to appoint someone to make decisions on your behalf if you become unable to do so due to mental incapacity or other circumstances.
Not having a valid Lasting Power of Attorney in place can pose several risks, including:
1. Loss of control: Without an LPA, you have no say in who will make decisions on your behalf. If you become incapacitated, important decisions about your health, welfare, or finances may be made by someone you wouldn’t have chosen yourself.
2. Financial difficulties: If you’re unable to manage your finances due to incapacitation and don’t have an LPA for finance and property, it could lead to significant financial difficulties. Bills may go unpaid, investments may not be managed properly, and your overall financial wellbeing could suffer.
3. Healthcare decisions: Without an LPA for health and welfare, the person responsible for making decisions about your medical treatment may not be aware of your preferences or wishes. This can result in medical treatments that you may not have wanted or an inability to access certain treatments or services.
4. Family disputes: In the absence of an LPA, family members may have differing opinions about who should make decisions on your behalf. This can lead to conflicts and disputes within the family, causing unnecessary stress and potential legal battles.
5. Court involvement: Without an LPA, if you become incapacitated, it may be necessary for your family or loved ones to apply to the Court of Protection to become your deputy. This process can be time-consuming, expensive, and emotionally challenging.
It’s important to note that these risks can be mitigated by having a properly executed LPA in place. It allows you to choose trusted individuals to act as your attorneys and ensures your wishes and best interests are taken into account if you are unable to make decisions yourself.
It’s advisable to consult with a solicitor or estate planning specialist like Will Protect to understand the specific legal requirements and implications of creating a Lasting Power of Attorney based on your individual circumstances and the laws in effect at the time.
What an LPA will protect you from
Without a Lasting Power of Attorney in place for health and welfare and finance and property you could have your decisions made for you.
Those individuals who you have chosen as your attorneys will have the authority to express your wishes, laid out in your LPA, on your behalf.
This authority is protected by the Court of Protection and must be adhered to by the authorities. If you do not have a Lasting Power of Attorney in place, you could be placed into care against your wishes for a number of reasons.
Some examples are described here:
1. Mental capacity issues: If an individual lacks mental capacity and is deemed unable to make decisions about their care, authorities may make the decision to place them in care for their own safety and wellbeing.
2. Safeguarding concerns: In cases where there are serious safeguarding concerns, such as instances of abuse or neglect, authorities may intervene and place individuals in care to protect them from harm.
3. Lack of suitable support: If an individual is living in circumstances that are considered unsafe or unsuitable, and they are unable to access the necessary support or care within their current environment, authorities may make the decision to place them in care for their own welfare.
4. Health-related reasons: In situations where an individual’s health condition requires specialised care or treatment that cannot be provided in their current setting, they may be placed in care against their wishes to ensure they receive appropriate medical attention.
5. Court orders: In some cases, a court order may be issued if there are legal grounds to override an individual’s wishes and place them in care. This could be due to concerns about their mental capacity or the need to protect their best interests.
These situations are complex and decisions to place individuals in care are made based on assessments of their wellbeing and best interests. Legal processes and safeguards are typically in place to ensure that such decisions are made with careful consideration and consultation with relevant parties. However, remember that if your wish is to stay in your home for example, this may not be considered if you have lost mental capacity, and don’t have a Lasting Power of Attorney in place. Your rights and wishes may not be considered in equal measure to your wellbeing.
Case Studies
Exposure so Inheritance Tax
- Unmarried Couple in their 70’s both with children from previous marriages. Male partner dies intestate leaving partner (who now has dementia with no LPAs) with a £120,000 IHT liability
- His step son called us to ask if they had completed their estate planning (he was aware of us through networking and perhaps saw my emails to the client with recommendations. We had to advise that sadly nothing was in place, that the couple had attended several estate planning workshops but didn’t follow up with a private consultation when this was offered to them
- There is now nothing that we can do to assist the family other than offer probate services
Deed of Variation and Additional Costs
- Middle aged male client with elderly father and younger brother who is on benefits and requires assisted living
- Client procrastinated in dealing with his fathers affairs (needed LPAs, updated will & trust to accommodate instructions to look after his youngest son)
- Elderly father’s condition deteriorated quickly and he passed away before the planning could be implemented
- A deed of variation will now be needed to retrospectively implement the planning but this is more expensive and could have been dealt with before death leaving the family to grieve without the hassle of dealing with all of this
Loss of Mental Capacity and Medical Care
- Middle aged lady with elderly parents who only have a very basic will with no trusts and no LPAs
- Parents procrastinated about proceeding with estate planning
- Father had a severe stroke which left him unable to speak
- No LPAs or updated wills/trusts
- Made it incredibly difficult for family to deal with hospitals and care providers without the Lasting Power of Attorney
- Doctors have now advised that he has lost capacity so it’s too late to put any Lasting Powers of Attorney or wills with trusts in place
Acting as a Deputy if there is no LPA in place
The cost of applying to the Court of Protection to act as a deputy in the absence of a Lasting Power of Attorney can vary depending on various factors, including the complexity of the situation and the amount of work involved.
It’s important to note that involving the Court of Protection can be expensive due to the legal fees and ongoing costs. Some potential costs associated with the Court of Protection deputyship include:
1. Assessment Fee: There is usually an assessment fee that needs to be paid to the Court of Protection when applying for deputyship.
The assessment fee for a new deputyship application was £400, and the annual supervision fee is £320.
If the Court deems that a hearing is required there will be an additional £500 fee. You will also have to pay a £100 assessment fee if you have not acted as a deputy before.
These fees are subject to change, so it’s essential to consult the official UK government website or seek legal advice for the most up-to-date information.
2. Legal and Professional Fees: Engaging solicitors or an estate planning consultancy such as Will Protect to guide you through the deputyship application process can incur additional costs. The fees will vary based on the complexity of your case but you can expect to pay between £400 – £2000 + VAT.
3. Ongoing Costs: Once appointed, deputies are required to provide annual reports and financial statements to the Court of Protection. There may be ongoing administrative costs associated with fulfilling these reporting requirements. You will have to pay the £320 fee for general supervision.
The involvement of the Court of Protection can result in ongoing supervision, which may limit the flexibility and autonomy of decision-making compared to having a Lasting Power of Attorney in place.
What does it cost to put an LPA in place?
The cost of creating a Lasting Power of Attorney can vary depending on several factors, including complexity, and whether you engage an estate planning consultancy such as Will Protect, a solicitor, or use a DIY option.
The registration fee set by the Office of the Public Guardian is £82 per LPA. Remember that there are separate Lasting Powers of Attorney to cover property and finance and health and welfare. Our advice is always to put both in place to ensure that you are fully protected.
It is advisable to seek professional advice on your Lasting Power of Attorney because they are complex legal documents that, if not completed correctly could, at best, be rejected by the Office of the Public Guardian, or at worst, be open to legal challenge from local authorities, family, or others.
