We are now living longer than ever before and as a consequence, the likelihood of us losing capacity at some point whether through dementia, illness or accident is far more prevalent.
It is often assumed that if we were unable to look after our own affairs that those closest to us would simply take over and make decisions about our finances and health care. Sadly, without LPAs in place, the reality is considerably more complicated and the burden placed on loved ones can be physically and emotionally devastating.
If we are considered to have lost capacity, Social Services will consider us to be vulnerable and they have a duty to inform financial institutions.
Financial Institutions such as your Bank, Building Society and Insurers have a fiduciary responsibility to protect vulnerable clients. They do this by freezing all your assets preventing any access to funds, making any changes or the ability to renew your insurances.
If you are considered to have lost capacity and don’t have an LPA, you and those closest to you would not be able to gain access, take action or make decisions in relation to any of your financial matters including:
The Court of Protection would appoint a Court Deputy to look after your financial affairs and make decisions on your behalf.
This will typically be someone that you have never met and their responsibility is only to you and your welfare. They will not be able to take care of those who rely on you or who share your assets.
Furthermore, fees are charged for a Court Deputy, which are often significant.
Without LPAs in place, those closest to you do not have the right to make decisions about your medical treatment and welfare, including whether or not you need long term residential care and where that should be.
Lasting Powers of Attorney are made whilst you have full capacity and they set out who it is that you want to look after you and your affairs should you suffer a loss of capacity.
There are two types of Lasting Power of Attorney:
Having these LPAs in place and registered prior to a loss of capacity will mean that a person, or persons, that you trust to look after you will be able to control your finances and make decisions about your medical treatment and general welfare.
Someone you trust will be able to take over without cost or delay and without the need of a Court Deputy or Deputyship Order.
“If you are the joint account holder and the other joint account holder becomes mentally incapable, you do not automatically have the right to access the account unless you have a Lasting Power of Attorney, Enduring Power of Attorney or an order from the Court of Protection.”