Talking about death and illness is never easy, but getting your affairs in order can help provide you and your family with valuable peace of mind.
Many of us put off thinking about what would happen if we were no longer able to manage our money, or make decisions concerning our health, but the coronavirus pandemic has highlighted how important it is to prepare for every eventuality.
The best way to ensure your affairs will be managed in the way you want is by writing a Lasting Power of Attorney (LPA). This is a legal agreement that enables you to appoint someone you trust to make decisions on your behalf if you can’t make them yourself.
The government is currently looking at upgrading the system for people to register an LPA to make the process easier and more streamlined, and is currently consulting on how best to do this.
What happens if I’m unable to look after my affairs but don’t have an LPA in place?
If you don’t have an LPA in place, someone will have to apply to the Court of Protection to be appointed your ‘Deputy’ so that they can manage your affairs. As you will be unable to make decisions yourself at this point, you won’t be able to choose who acts as your deputy, which means it may not end up being the person you want it to be. Having to rush through the application process if difficult decisions need to be made quickly, can also cause significant added anguish at what is a very distressing time for your loved ones.
Despite these risks, according to a report by Co-op Legal Services, two thirds (66%) of those aged 75 and over do not have a LPA, rising to four fifths (83%) of people aged 50 and over.
Men are less likely than women to have a legal agreement in place, with just over a tenth (14%) of men over the age of 50 having appointed a LPA, compared to almost a fifth (19%) of women.
Here, we explain how LPAs work, why they’re so important, and how to go about setting one up.
How LPAs work
An LPA is designed to allow you to pass control of your affairs to another person, usually your spouse, child or another family member or close friend, in the event that you become seriously ill or are involved in an accident which results in you losing your mental capacity.
In legal speak, when an LPA is drafted, the person who sets one up (i.e. you) is known as the ‘donor’ while the person you want to manage your affairs is known as your ‘attorney’.
There are two different types of LPA.
The first is a Property & Financial Affairs LPA. This allows someone to manage your financial affairs on your behalf, from your bank accounts, investments and taxes, to paying your bills and even selling your home.
The second is a Health and Welfare LPA. This lets your attorney take control of decisions regarding your health, so for example they might decide when you need to move into care, or what medical treatments you receive. This may include decisions about end-of-life care or whether or not to resuscitate.
These are two separate documents, so you can choose to have either or both. In England and Wales, the two LPAs have replaced the single Enduring Power of Attorney (EPA). However, EPAs that were made and signed before 1 October 2007 can still be used.
In Scotland these types of contract are respectively referred to as ‘Continuing Power of Attorney’ and a ‘Welfare Power of Attorney’. In Northern Ireland there is just one type of LPA known as an ‘Enduring Power of Attorney’, and it only covers financial affairs, not healthcare.
Who can set up an LPA?
Anyone over 18 can set up an LPA. You don’t have to be in ill health to do so but you must be of sound mind when you set it up as you cannot make an LPA after you have lost your mental capacity.
As it’s impossible to foresee illness or accidents, it makes sense for everyone to consider putting an LPA in place. There is obviously a more pressing need for anyone who has already been diagnosed with an illness, such as dementia, which could affect their mental capacity in future.
James Antoniou, head of wills and LPAs at the Co-op said: “Many people do not realise that without a lasting power of attorney, nobody has the legal authority to manage their financial affairs and welfare, if they become unable to do so.”
“Unfortunately, anyone can be impacted by an accident or illness at any time, so putting it in place is not really about how old you are, it’s more about just being smart and on the ball.”
Who can be an attorney and what can they control?
Your chosen attorney must be at least 18 years of age and be of sound mind. You can appoint more than one attorney to act on your behalf if you want to, so people with two or more children often decide to give both or all of their children power of attorney.
If you do this, you must clarify if they will make decisions jointly or separately. If they must make them together, or ‘jointly’, then all attorneys must be in agreement when a decision is made. You can choose for just big decisions to be made jointly if you want to, such as perhaps the sale of your home, while others can be made individually.
There is also the option to impose restrictions on your attorneys, so you might want them to make decisions on some things but not others, or you can leave instructions and preferences for your attorneys to direct and guide the way they act. For example, you might include a command for them not to move you into residential care unless your doctor says that you can no longer live independently. Any instructions you make must be clear and practical, otherwise they can be rejected.
How do I set up an LPA?
All forms will need to be signed and witnessed by your attorneys and witnesses in a strict order before you submit them.
The donor must sign first, followed by the certificate provider, the attorney(s), the replacement attorney(s) and lastly the person registering the application which could be the donor or the attorney.
The ‘certificate provider’ is usually either a solicitor or a person who has known you for more than two years and can confirm that you understand what you’re doing. The names, addresses and dates of birth of the attorneys and donor must all be included in full.
The person who witnesses your signature must be over the age of 18 and cannot be one of your attorneys or replacement attorneys. Your certificate provider can act as your witness if necessary.
The coronavirus pandemic makes getting people to witness documents trickier than usual, especially if you are shielding or self-isolating, as signatures are not allowed to be witnessed over video conference calls. However, you can still comply with government guidance by asking a witness to watch you sign the document outside or through a closed window. Witnesses must have a clear view of the blank signature and date box before they are signed.
Your witness can be anyone over 18 who is not an attorney or replacement attorney, so could be a neighbour or friend who lives nearby. The attorney’s witness can be anyone over 18 but must not be the donor.
Once your application is completed, you’ll need to register it with the Office for the Public Guardian (OPG). You can find their contact details here. An LPA must be registered before it can be used and registration usually takes an average of 8 to 10 weeks, provided there are no objections or mistakes on the forms. It is therefore advisable to register your LPA before it is needed so that it is ready to be used immediately.
Bear in mind that even if you make and register a LPA, that does not mean you are automatically handing over control of your financial affairs. A property and financial affairs LPA can be used at any time once it has been registered (even whilst the donor still has capacity), but only with the consent of the donor, whereas a health and welfare LPA can only be used when the donor has lost capacity (even when it has been registered).
In addition, provided you still have the mental capacity to do so, you can cancel an LPA at any time, by drawing up a written statement entitled a ‘deed of revocation’.
To find out more about setting up and registering an LPA, and for details regarding how they differ in Northern Ireland and Scotland, visit Gov.uk’s Lasting Power of Attorney service.
The costs involved
Unless you use a solicitor, it is free to prepare an LPA. But while there are no costs for preparing an LPA, there is a fee for registering it. The registration fees in England and Wales are currently £82 for each LPA, so if you’re registering both an LPA for property and financial affairs and one for health and welfare, it will set you back £164. If your income is less than £12,000 a year, you may be eligible for a fee reduction, which brings the cost down to £41.
If you receive any of the following means-tested benefits you can also apply for a fees exemption, or your attorney or solicitor can do so on your behalf:
- Income Support
- Income-based Employment and Support Allowance
- Income-based Jobseeker’s Allowance
- Guarantee Credit element of State Pension Credit
- Housing Benefit
- Council Tax Reduction/Support
- Local Housing Allowance
A combination of Working Tax Credit and at least one of: Child Tax Credit, Disability Element of Working Tax Credit, Severe Disability Element of Working Tax Credit.
The cost for registering a power of attorney in Scotland is £79 and £151 in Northern Ireland.
An LPA is an important document and unless you follow the correct process when setting one up, there’s a risk your application might not be accepted. Although you don’t have to use a solicitor to set one up, it may be worth your while seeking help from one to ensure yours is registered properly.
If you don’t already have a solicitor, you can find one through the Law Society’s free Find a solicitor service.
Consider updating your will at the same time
As well as making sure you have an LPA in place, it’s also a good idea to check that you have an up to date will. This will ensure you have control over what happens to your estate when you die. Find out more about why wills matter in our article The importance of writing a will or if you’re ready to get started you could read our detailed guide on how to write a will.
You can choose to either use a local solicitor or a will writing service depending on the complexity of your affairs.
If you want to use a solicitor, you can find one on the Law Society’s database – it can be helpful to search for one who specialises in wills and probate. The cost will depend on how complex your estate is and exactly what you want to do, but expect to pay from a few hundred pounds to over £1,000, depending on your estate and the solicitor you use. If you are putting assets into trust for example, the cost will be greater. You should discuss exactly what you want and how much it will cost upfront to avoid any doubt.
Alternatively, if you have a relatively straightforward set of circumstances, you could consider using one of a number of specialist will writing services available in the market.
If you’re looking for somewhere to start, we have partnered with Farewill, a reputable online provider who have an excellent trustpilot rating. They are offering Rest Less members a 20% discount off the cost of writing your will if you use the code ‘restless21’ at the online checkout. The normal cost of writing a will online (before the discount is applied) with Farewill is £90 for a single will or £140 for a couples will. If you want to make your will over the phone this rises to £120 for a single will, or £190 for couples.
Are you considering setting up a LPA, or have you had to act as a power of attorney for a family member or loved one? If so, we’d be interested in hearing from you. You can get in touch on the Rest Less Community forum or post a comment below.