The importance of organising Lasting Powers of Attorney are slowly being realised by the general public. The passing of the 2005 Mental Capacity Act (MCA) on 1st October 2007 has had far reaching repercussions for many families in England and Wales. The effects of the Act are set to multiply greatly as more and more people come in to contact with the Office of the Public Guardian and Court of Protection.
The Act was set up to provide:
"a framework to empower and protect people who may lack capacity to make some decisions for themselves. It makes it clear who can take decisions in which situations, and how they should go about this. It also allows people to plan ahead for a time when they may lack capacity. It will cover major decisions about someone's property and affairs, healthcare treatment and where the person lives, as well as everyday decisions about personal care (such as what the person eats), where the person lacks capacity to make those decisions themselves."
At first glance this seems a measured and sensible approach to protect those who are vulnerable and lack the mental capacity to look after themselves. The upshot for many people however has been very different. Take for example the obligations of the British Bankers Association which must follow the MCA statute.
In brief it declares that if an individual has lost mental capacity no one, including the spouse, is allowed access to the assets and accounts (even those held jointly) in that individual's name. Nor can anyone act for, or sign on behalf of that individual.
1. HAVE AN ENDURING OR LASTING POWER OF ATTORNEY ALREADY IN PLACE.
OR
2. AN APPLICATION TO THE COURT OF PROTECTION.
Option 2 is where heartache, expense and often years of frustration can lead. Just Google "Court of Protection problems" or look at the Alzheimers Society Forums on the internet, and you will see that they are overrun with people at their wits-end because no Lasting Power of Attorney was in place, leaving the Court of Protection to step in and appoint a Deputy.
The following shows an example of what can happen when Incapacity strikes and there is no Power of Attorney in place.
An example of an incapacity case step by step:
DAY 1: David 63 has multiple strokes
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DAY 4: Family told he will never fully recover
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DAY 9: All bank accounts etc. with David;s name on are "frozen". His wife Fiona is unable to sign or act on husband's behalf. She needs to make an application to Court of Protection. Total cost will be approx. £2,000 to £3,000 and will take 3-4 months
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DAY 10: Unable to finance application as she cannot access savings. Income now restricted and is unable to pay all the household bills. Son comes to her aid and funds Court application and provides £300pm toward household bills whilst court application progresses.
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DAY 15: Fiona has to establish a new bank account in own name as her own pension is paid in to a frozen joint account which she cannot access.
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Day 30: Due to husband's physical situation there is urgent need to move to a bungalow. This cannot happen as she is unable sign for husband and so Fiona will have to wait for her Court application to succeed.
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DAY 116: Court makes its ruling. She will be made "deputy" but first she must take out £275,000 guarantee bond to protect her own husband's assets against her mismanagement! Cost £550 pa.
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DAY 118: Court tells her how much she can write a cheque out for. Must keep detailed accounts and make regular reports to the Court. There will be fees for the different reports and Court requests
All this will go on day in day out, until her husband recovers or dies.
The other real tragedy behind this story is that Fiona and David knew full well that they could have got LPAs for as little as £200 each, and so avoided all the stress and intrusion of the Court of Protection. But time and time again they put off making a decision until David was struck down and the decision was taken away from them.
As the Mental Capacity Act is only a relatively new piece of legislation the trauma and considerable stress currently being experienced by thousands of people is expected to multiply exponentially over the coming years.
With an increasingly ageing population and a rise in the onset of Dementia and other debilitating mental diseases the only sure way to protect yourself is to organise a Lasting Power of Attorney before it is too late.
Some people have found the cost at many solicitors to be prohibitive and then feel confused as to where to turn. Our fees are fixed up front, highly competitive and with no hidden extras.
Beware: If you employ someone to draft your LPA make doubly certain of their total cost. Many offer a low initial price, and then you discover extra costs for "acting as your Certificate Provider" and "preparing the registration paperwork". These are included in the Elite Wills price; with us nothing is hidden.
At Elite Wills we believe that we have come up with the most cost effective solution. We offer a discount where two people in the same household arrange LPAs together, or where a single person arranges both types of LPA at the same time. A further discount is available where two people both arrange the two types of LPA.
We are passionate about getting these vital legal documents in place and will do all we can to help if cost is an issue.
We can also draft Advance Directives, sometimes called 'Living Wills' which may be an alternative to the 'Health & Welfare LPA' in certain situations, although we highly recommend that almost everybody should first have at least a 'Property & Financial Affairs LPA' in place as a minimum.
If you would like to discuss a Lasting Power of Attorney, the Court of Protection or any similar topics please feel free to contact Ian Hill, our Lasting Power of Attorney Specialist who will be happy to talk with you. Call 01903 261500.
Elite Wills & Estate Planning LLP (Partnership Number OC380425) is a Member of the MASTER GUILD OF WILL WRITERS.
