Understanding Power of Attorney: Why It Matters

The Importance of Power of Attorney

You may have heard of power of attorney and have some idea of what it entails. However, what does it actually mean? Who might set one up? This blog post aims to provide clarity on this important legal document.

Power of attorney is a crucial legal arrangement. It gives someone else the responsibility of managing your affairs. This includes making decisions on your behalf if you cannot do so due to illness, injury, or incapacity. Such decisions can range from medical care to daily routines and financial management.

Types of Lasting Power of Attorney (LPA)

There is more than one type of LPA (lasting power of attorney) in the UK. The different types of power of attorney are: Property and financial affairs LPA: This gives your attorney the power to manage your money, property, and other financial matters. Health and welfare LPA: This allows your attorney to make decisions about your daily routine, medical care, and end-of-life treatment if you lose mental capacity. It's set up for the best interests of the person involved. You can choose to nominate someone to handle either type of power of attorney or both if you wish. The person or persons you nominate to handle your affairs are known as ‘attorneys’; not to be mistaken with the American term for solicitors. This process can be carried out with the assistance of professionals from law firms that specialise in drafting power of attorney Doncaster (or elsewhere). My partner works for social services within a hospital setting and meets daily with people who, for whatever reason, haven't set up power of attorney and whose affairs are in a real pickle. People don't know that person's wishes, may disagree with the hospital's/local authority's decisions and feel that the person involved would want things done differently, and/or are unable to help with financial issues surrounding that person's life/care.

Addressing Care Issues Without an LPA

Imagine being in a hospital after a stroke. If you designated someone to manage your financial affairs prior to your incapacitation, you would have peace of mind. This person would understand your wishes and be able to pay your bills, discuss your situation with the Department for Work and Pensions, and even sell property if needed.

If you haven’t set up an LPA, your family faces several challenges. They could apply for deputyship through the court if you lack mental capacity. This process can take four to six months, which is often too long in urgent situations.

The Consequences of Not Having an LPA

If you don't have an LPA and cannot manage your affairs, nobody has legal permission to act on your behalf. The hospital will conduct a mental capacity assessment. If deemed not capable of making sound decisions, the local authority may apply for control of your finances.

This can have dire implications for your care. Local authorities often resort to the most economical options available. This may lead to placement in a care home, perhaps far from family and friends, even if that’s against your wishes. Your family may struggle to pay bills or manage your care during this process, potentially impacting your financial standing.

Financial Burdens on Families

Local authorities will pay for care, but they also have strict fee limits. If you have assets over £24,500, your family will be expected to pay back any costs incurred during your care. This can quickly deplete savings, especially considering the high costs of care services.

In some scenarios, families unknowingly make financial decisions that impact their futures. For instance, if funds are shared or improperly managed, it can lead to restrictive scenarios where loved ones are left unable to afford necessary care.

What Happens If You’re Ill Without an LPA?

Without an LPA, your options narrow significantly. Local authorities are tasked with assessing your care needs but will not necessarily align with what your family believes is best. Your family’s ability to affect change diminishes drastically without legal standing.

The Process of Setting Up an LPA

Now, let's talk about how to create a lasting power of attorney. Setting one up typically costs between £82 and £500, depending on whether you work with a solicitor or do it yourself online.

You must be of sound mind when applying. It's advisable to set this up early—preferably before any medical emergencies arise. You don't have to be elderly to benefit from a power of attorney. Anyone over 18 can be appointed as an attorney, provided they are not bankrupt.

Registering Your LPA

The power of attorney must be registered with the Office of the Public Guardian before it is valid. This process can take anywhere from 4 to 20 weeks. The registration fee is £82, which is waived for those on means-tested benefits. After registration, your attorney can begin making decisions on your behalf.

You can complete the necessary forms via the gov.uk website or seek assistance from service providers. Many offer to guide you through the process for an additional fee.

Peace of Mind for the Future

Overall, setting up a power of attorney ensures that your best interests are protected. It allows your wishes to be followed even when you cannot make decisions for yourself. Establishing an LPA is a relatively straightforward process that can offer significant peace of mind.

Taking proactive steps today can save you and your loved ones many challenges down the road. It’s important to have these discussions and make arrangements that are in your best interest.