The Martin Lewis Money Show brought to light the importance of creating a Lasting Power of Attorney and the potential legal pitfalls if you lose mental capacity without one.
This week’s Martin Lewis Money Show was centred around the three D’s: death, divorce, and dementia. In his show, Martin discussed the difficult but important conversions to help best prepare our finances for later life, including losing the mental capacity to make those decisions on our own.
The show details are below:
- The Martin Lewis Money Show Live
- Series 12 Episode 14, Tuesday 14th March 2023
- Link to VOD - Here
He started the show by explaining how it is vitally important that we try and engage in these conversations surrounding making a will, talking about death, and discussing appointing a Power of Attorney with our friends and family.
From around the 20:15 minute mark to the 28:30 minute mark Martin discussed the importance of a Lasting Power of Attorney (LPA) in particular. On his Big Briefing board on Power of Attorney, he described the following in detail:
Lose your faculties and sorting finances is hard – (dementia, accident, stroke)
- Don’t assume family can access your funds, even to pay for your case
- They would need to apply via Court of Protection – (hassle, long, costly)
A Power of Attorney is the solution
- You nominate a friend/relative to take over your affairs IF you lose faculties
- Doesn’t mean you lose control now
There’s also a separate Health & Welfare POA
- Gives someone ability to control welfare decisions if you can’t
Once you’re acting as Attorney, register it with Banks/Services ASAP
- Don’t wait until you need to use it as it takes time
- If going into branch, book an appointment, allow time
- Give banks “certified” copies rather than originals
- POA registered after January 2016, request free online code via gov.uk
Thankfully it seems banks are getting better at dealing with it
- Feedback was strong in a recent survey of POA users
- 60%+ great: TSB, Lloyds, Halifax
- 50%+ great: First Direct, Santander, Nationwide, NatWest
He was also asked a couple of interesting questions about LPAs, including:
What controls are in place to ensure the person acting with Power of Attorney is acting in the best interests of the donor?
The show’s resident solicitor stated that a Power of Attorney is extremely powerful as you are giving someone the responsibility to manage all of your finances. When you give that power, you should make use of the protective parts within LPAs, such as notifying somebody when you are going to use it.
You must also choose somebody you fully trust, or more than one person. You can put guidance in place, and restrictions on how they can use the LPA.
Is it better to have one Attorney or multiple?
The show’s resident solicitor stated that if you have more than one person, you can appoint them so that they have to make all decisions together, which can be problematic. If one Attorney dies, then the whole arrangement fails because you can’t have it proceeding with one surviving attorney.
Having said this, you can appoint Attorneys to act “jointly and severally”. This means that either one of them can handle anything at any given point and, if an Attorney passes away, the surviving individual can continue.
A donor may have:
- Stated they wanted their attorneys to decide some matters jointly but others severally
- Specified certain affairs that they don’t want their attorneys to manage at all
We thought the programme was very insightful and gave a good overview of the importance of creating a Lasting Power of Attorney.
Below we detail some information if you have missed the programme or if it was simply not covered by Martin Lewis. If you would like any more guidance, please get in touch with our expert Lasting Power of Attorney solicitors.
What are Lasting Powers of Attorney?
LPAs are legal documents that allow you to appoint one or more individuals (called attorneys) to make key decisions about your estate and welfare during your lifetime, if something happens that renders you unable to do so independently.
These were introduced in October 2007 as part of the Mental Capacity Act 2005, replacing the older system of Enduring Powers of Attorney. There are two kinds of LPAs:
- Lasting Powers of Attorney (Property and Affairs) - these enable you to authorise your attorney to make decisions regarding your finances, bills, bank accounts and property
- Lasting Powers of Attorney (Health and Welfare) - these delegate responsibility for your health and personal welfare to your attorney, including decisions about where you should live and what day-to-day care or medical treatments you should receive
You must have the document registered with the Office of the Public Guardian for the LPA to be binding and effective; without this, your attorney will have no legal authority to act on your behalf. Your attorney can be a professional solicitor, but this is not a requirement.
What will happen if I haven't made a lasting power of attorney?
If you do not have a valid Lasting Power of Attorney in place and you lose your mental capacity, your relatives may be forced to make an application to the Court of Protection whereby a Deputy is appointed to deal with your property and financial affairs. The Court appoints the Deputy.
The Deputy, therefore, might not be someone who you would have chosen to deal with your property and financial affairs. The appointment of a Deputy process is both long-winded and considerably more expensive than making a Lasting Power of Attorney Deed.
The cost of applying for someone to be appointed to be your Deputy is not just a one-off cost as the Court of Protection requires annual Court fees and insurance payments as well which may run into thousands of pounds over the years.
Who can be chosen as an attorney under an LPA?
Anyone over the age of 18 can be selected as an attorney under the terms of an LPA, including partners, family members, friends, and associates. You may also wish to nominate a professional attorney, such as a solicitor, to oversee complex financial decisions.
When choosing a designated attorney, it is worth considering the following questions:
- Do you trust them to understand and respect your wishes?
- Are they willing and comfortable to act as your attorney and carry out your requests?
- Do you believe them to be capable of managing your affairs?
- Which responsibilities would you be comfortable entrusting them with?
It is possible to nominate multiple attorneys and specify whether they need to act jointly or separately on specific decisions. However, it is worth bearing in mind that disagreements between attorneys can sometimes arise, which is why it may be best to ensure that responsibilities are clearly delineated in your LPA.
How can our specialist lasting power of attorney solicitors help you?
If you are seeking to make a lasting power of attorney document, Percy Hughes & Roberts can provide legal guidance and support through each stage of the process, including:
- Discussing the different types of powers that can be allocated to an attorney through an LPA
- Helping you select the right type and structure for your LPA to meet your specific needs
- Advising you on choosing an appropriate attorney or attorneys
- Drafting the LPA document itself, with wording and clauses tailored specifically to address your personal needs and priorities
- Assisting your chosen attorneys in completing the paperwork and certifying the document
- Registering the LPA with the Office of the Public Guardian to make it legally binding
Mistakes made during this process may result in the LPA failing to meet the necessary legal standard, or failing to provide the level of protection and legal clarity you were seeking. If this happens, the LPA document may be rejected, extending your waiting period by months, which is why getting the right specialist legal support on your LPA is so important.
You can view the whole Martin Lewis Money Show by visiting the ITVX player here –