Lasting Powers of Attorney – a document more important than a Will?
It’s a controversial suggestion and perhaps one that you would immediately be inclined to disagree with. However, yesterday Kate Garraway (Good Morning Britain host) openly spoke about the financial problems she is having whilst her husband, Derek Draper, continues to be treated for covid-19 in hospital, as he did not have a power of attorney in place, before falling ill. This therefore means that no one, including Mrs Garraway, has authority to deal with her husband’s financial affairs whilst he is unable to do so. Unfortunately, in this case all utility bills and some policies and bank accounts are in Mr Draper’s sole name. ‘This is making life very complicated because I cannot get access to things’ says Mrs Garraway. This could have been avoided had a power of attorney been put in place.
Lasting Powers of Attorney (LPAs) are documents within which you (The Donor) appoint named individuals (Attorneys) to make decisions on your behalf in your lifetime either if you lose capacity or in the case of financial decisions, while you have capacity if you require assistance.
The reality is that all decisions made by an Attorney on your behalf will have a direct impact on you in your lifetime whereas the provisions of your Will can only take effect on your death and you will not be alive to experience the result of its terms. Choices relating to your place of residence, how your money is spent and what care you receive can all potentially be made by your Attorneys. In the knowledge that your lifestyle and future could be directly affected by good or bad decisions that your Attorney(s) make on your behalf you may be starting to think that an LPA is more of a priority than first thought.
We describe LPAs to clients as insurance policies that you may never need to use but are in place just in case.
If you are yet to make LPAs we suggest that you start by considering these four questions:
- WHO? You can have up to four Attorneys and four replacement Attorneys. Your Attorneys must be trustworthy and be people that you would feel comfortable making decisions on your behalf.
- WHAT? There are two types of LPAs, one that covers health and welfare decisions and another that covers financial decisions. Depending on your circumstances you may also need to consider a Business LPA?
- WHEN? You can choose to restrict a financial LPA’s use so that Attorneys only act when you lose capacity. If appointing more than one Attorney, you can also include restrictions on when Attorneys can make decisions on their own or when they must make decisions together.
- HOW? If you have more than one Attorney do you want them to make all decisions together (jointly) or have the flexibility to make some decisions together and some alone (jointly and severally)?
Ultimately both Wills and LPAs are documents that we advise all clients to prepare. Neither is more important than the other as they have different roles and together provide a full complement of lifetime and estate planning. However, we would urge clients to think again before dismissing the need for an LPA as the scope of its potential use is priceless especially at this current time.