Don’t make lasting power of attorney mistakes
Having a lasting power of attorney in place means that a trusted family member or friend can make decisions about your health or finances if you lose capacity
None of us like to think about being unable to make important decisions about our money or health, but as the current Coronation Street storyline shows, it’s worth planning ahead in case the worst happens.
After an accident, the soap’s Audrey Roberts has started distancing herself from close members of her family, instead putting her trust in her long-lost son Stephen Reid. She tells her family she has arranged her will so that they will benefit from trust funds, which Stephen will be in charge of distributing when she dies. Grandson David Platt doubts Stephen’s motives for returning, and mistakenly thinks they can get Audrey to change her will using power of attorney. However, no-one can take control of your welfare or finances without your prior agreement, or after you’ve lost capacity to manage your own affairs.
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David is not alone in misunderstanding how lasting powers of attorney work. According to research by Lloyds Bank, almost a third of people wrongly believe power of attorney is only put in place after a person becomes ill and not before - leading to potentially costly consequences.
Emily Deane, trust and estate practitioner and technical counsel and head of government affairs at the Society of Trust and Estate Practitioners (STEP), said of the Corrie storyline: “It shows millions of people how important good legal advice is for everyone, including ordinary people like Audrey.
“There are different types of power of attorney. Having a lasting power of attorney in place means that a trusted family member or friend can make decisions about your health or finances if you lose capacity and cannot decide for yourself.”
Why lasting powers of attorney matter – and how to set one up
It’s impossible for any of us to predict what the future holds, so setting up a lasting power of attorney can provide valuable peace of mind that your wishes will be followed if you can’t carry them out yourself, perhaps due to an accident or illness.
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Shaun Moore, tax and financial planning expert at Quilter said: “Some people believe that setting up a lasting power of attorney will leave them vulnerable and choose not to set one up, but this is not the case. Additionally, many people only associate having a lasting power of attorney with older people and therefore believe they do not need to think about it yet, but this is the very reason they should have one in place.”
To register a lasting power of attorney, you'll need to send a LP1F form to the Office of the Public Guardian for financial decisions, and a form
LP1H for health and care decisions.
When completing these forms, you’ll need to choose an attorney or attorneys to act on your behalf. You must also choose a certificate provider who can be a friend or colleague who has known you personally for over two years or alternatively you can use a professional contact such as your doctor solicitor. The certificate provider will need to confirm your capacity at the time of registration.
Once you, your attorney/s and your witnesses have signed the forms, they can then be sent to the submitted to the Office for the Public Guardian who will send back a stamped copy once the forms haven been approved. Only at this point does the lasting power of attorney become valid.
It costs £82 to register your lasting power of attorney with the Office for the Public Guardian, but if you’re on a low income or claiming benefits, you may be eligible for a discount, or might not have to pay a fee at all.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown said: “People put these decisions off and risk financial chaos by not having documents such as a lasting power of attorney in place. This means no-one can step in should a loved one lose track of how they are managing their finances or stop a scammer from manipulating a vulnerable person to get their hands on their cash. In the worst-case scenarios family may be forced to apply to the Court of Protection for a deputyship order which can be both time-consuming and costly.”
If you want to find an advisor to help you with your will or setting up a lasting power of attorney, you can search for one using STEP’s Find a TEP service.