Lasting Powers of Attorney – some practical issues
There are two types of Lasting Power of Attorney, one dealing with financial affairs and the other dealing with health and welfare decisions. In this blog, I’m going to give some practical examples of how the financial one works.
It can work, if you are well, but have a physical impairment and cannot get to the bank to deal with your financial affairs, at this time, your attorneys should act on your instructions only. They are effectively doing your running around.
If and when you ever lose capacity, your attorney will act for you, but they make your decisions, so it is important that you trust them.
Unless restricted, the LPA will cover everything you own, which includes all those lovely sentimental things that you own, as well as your cash and house. Make sure your attorney knows your intentions for all of it, the sentimental stuff is where people often row!
So what if you don’t have an LPA, well if you can’t get to your money, then unless you’ve made arrangements no-one can, so your bills won’t get paid. If you live at home, your repairs or new equipment can’t be purchased, which will impair your ability to successfully live at home. If you are in a care home, then your fees won’t get paid and the home will not want you there. Often the Local Authority will step in on an interim basis to meet your fees in the short term, but they will want reimbursement and if necessary will take on deputyship themselves (which is like a power of attorney, but granted by the Court of Protection), which is a far more expensive option.
So what can your attorney do with your money? It is meant to be used for your benefit, so making modest gifts probably is for your benefit, if you have always made them, you could appear ungenerous if you stopped giving Christmas and birthday presents. However the power to make gifts is very limited, it must be “on occasion”, such as birthday, Christmas, wedding etc and it must be reasonable in all the circumstances, including the size of the estate, which means that the attorney cannot give themselves thousands of pounds just because they fancy it! Or at least they shouldn’t, which is why you should trust your attorneys.
They can spend the money on you, on your needs, to ensure that you are housed, clothed, fed and cared for. And beyond these basic needs, depending on how much money you have, they may also buy for you some luxuries that you like, such as a holiday, if you are capable of travel. Whatever they spend your money on, it should be with you in mind, not just what a generic person like you would want. Some people love chocolate, others are allergic, so whatever your guilty pleasure is, if you have enough money for it and there is no clinical reason why you can’t have it, your attorney should purchase this for you!
If you have any questions about LPAs, please contact me.