Private Client Senior Associate, Sara McGrigor outlines why a Lasting Power of Attorney (LPA) is so important, and the issues that could arise if an LPA is not put in place.
When is the right time to put a Power of Attorney in place?
There are two types of LPA: one dealing with Health and Welfare issues, one dealing with Property an Financial affairs. A financial LPA (depending on how it's set up) can be used both when the person has capacity to make their own decisions and when they cannot; a health and welfare LPA can only be used when the person cannot make their own decisions.
Arguably there is no wrong time to put an LPA in place and any person over 18 should have them. Having said that, in practice, people tend to wait until they are in their mid to late 50s. In my opinion they should be thought of as akin to an insurance policy.
An LPA cannot be used until it is registered with the Office of the Public Guardian. I always strongly suggest that this is done at the outset so that, if needed, the LPA(s) can be used without the delay of the registration process.
Why is it important to give someone Power of Attorney?
If you grant an LPA to one or more people (called attorneys), then you remain in control and get to choose the person(s) who will manage your affairs/make the health or welfare decisions if you cannot or, in some financial cases, when you choose not to (such as going on a worldwide trip!).
Is it possible to set up a power of attorney even if the donor is unable to make their own decisions?
No, by then it is too late and the only option would be to apply to the Court of Protection for a Deputyship order, which is a slow and relatively expensive process.
What issues could arise if something happens and you don’t have an LPA in place?
If someone does not have a financial LPA in place and they then lose capacity, it will be very difficult to manage their finances and there will be a delay (and potential financial issues such as late payment of bills/debts accruing) whilst an application is made for a deputy to be appointed by the Court. In addition the deputy will not necessarily be who the person would have chosen had they made an LPA. Applications for Health and Welfare Deputies are more rare, and even more rarely successful.
What happens if someone abuses Power of Attorney? Who monitors attorneys?
Being an attorney is a serious undertaking with strict rules of conduct that need to be followed. The Office of the Public Guardian supervise attorneys and any suspected abuse should be reported to them.