Planning for an Uncertain Future

Jeanette Berry, Assistant Solicitor at Brabners Chaffe Street LLP

examines how to protect assets against the loss of mental capacity

No one wants to entertain the idea that one day their mental condition may deteriorate, but the statistics speak for themselves. Currently 700,000 people in the UK have dementia and this will grow to over a million by 2025.

Clearly planning for this eventuality is not a pleasant task, but given the cost, time and upset that can be caused to family or friends, who may take responsibility for your affairs if you lose mental capacity, it makes sense to look at the options sooner rather than later.

Creating a ‘Lasting Power of Attorney’ (LPA) while you are fit and of sound mind is a good way to safeguard your assets in the future, whatever may happen. Simply put, an LPA enables a person to give permission to someone to act on their behalf to ensure their financial and personal welfare are still taken care of, whatever happens to you in the future.

There are two types of LPA – a personal welfare LPA will cover choices on where you live, what medical treatment you will be given, and any other matters that concern your personal wellbeing. A property and affairs LPA will enable an attorney to manage your financial assets and protect them in the future. The first step is clearly to decide whether both or only one of these LPA routes is most appropriate for you. The application procedures for both are quite standard, so it’s more important at this stage to assess your priorities and ensure you’re selecting the right protection for your future. Seeking advice from a solicitor at this stage is advised, as they will be able to help you through the entire process quickly and without fuss.

The next step is to select your Attorney(s). You can have a sole attorney or multiple attorneys. They don’t have to be close or direct family members. They simply need to be someone you can trust – someone who you feel will always have your best interests at heart. Some people take this option as it removes the feeling of burdening a family member who may already be caring for you. However, the important thing is that you choose your attorneys, at a time when you are clear about who you want to be your attorney. There’s also the option to select a replacement attorney, in the case of the death, of the attorney originally chosen by you.

Secondly, you’ll need to decide who will be the Certificate Provider. This is the person who will certify that you’re currently in a sound state of mind and are not being put under pressure to appoint a certain attorney. This can be an independent professional person, so a GP or a trusted professional would be a suitable choice. Alternatively, someone who has known you personally for at least 2 years can be your Certificate Provider e.g. a close friend or neighbour. Essentially, this is a safeguard to ensure the LPA is being executed according to your wishes.

Once you’ve decided on the appropriate Attorneys and Certificate Provider, the LPA can be set up, but there are still other aspects to consider. Who will be notified when the LPA comes into force? Will this be just family members, or are there other people that you feel will need to be aware of the creation of the LPA? There are also options on ‘guidance’ within your LPA, which are not actually legally binding, and ‘restrictions’ which are. Again, a solicitor will be able to advise on the right level of protection for your circumstances.

Your LPA needs to be registered with the Public Guardianship Office (PGO) before it can be used by your attorneys and there’s an application fee of £120 to pay to the PGO, although this can be reduced or waived altogether if you are on a low income. We recommend to clients that they register their LPA as soon as it’s completed, as it can take at least 6 weeks before the registration process is complete.

As you can see, there are a lot of important considerations that need to be made before you put pen to paper. A great deal of trust is required by all those involved, so it’s important to talk through all of your options with your family, your potential attorneys and your solicitor before committing to an LPA.

No one really wants to have to think about these eventualities, but planning for the future in this way will ensure you and your loved ones are protected, no matter what happens.

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