August 19, 2020

Sound Familiar? Situations in Which a Lasting Power of Attorney Can Help?

This post was written by: Rachel Jones

Often people only become aware of Lasting Powers of Attorney [“LPAs”] when they are wishing to help out a relative or friend when an unfortunate and unforeseen event occurs, however, these documents must be made proactively rather than respectively, before it is too late.  At Aston Bond we like to consider LPA’s a bit like insurance; hopefully never to be needed, but there as security just in case.  Here we will go through several scenarios showing the difficulties that can occur when LPA’s are not created.

Scenario 1

Joe and Emma own their property as Tenants in Common; meaning they own their property as two separate 50% shares.  Emma has developed Dementia and has had to move into a care home.  A few years later, Joe decides the family home is too big for him to live in alone, and looks to sell the property.  However as Emma’s condition has worsened, she no longer has capacity to manage her finances, and consequently she is not able to consent to the sale, meaning Joe is unable to sell the property.

In this scenario, as Emma has lost capacity to provide her consent to the house sale, Joe would require a court order to provide him with the authority to sell Emma’s share in the property as well as his own.  The process for obtaining a court order can be very long and time-consuming, therefore it is always beneficial when you own property as Tenants in Common to ensure you have LPA’s for Property and Financial Affairs so that you can appoint your co-owner as your attorney and allow them to easily continue to manage the property should you not be able to.

Scenario 2

Brian and Hilary are nearing 85, and have been living in their home for 60 years when Brian begins to show sign of Alzheimer’s.  His condition continues to deteriorate, however with Hilary’s help they are able to continue to get by together and Brian is adamant he wishes to remain in the family home for as long as possible.  One day Brian suffers a fall and after a short stay in the hospital, the doctors decide that he should be moved to a care home so that he can receive the additional care he will require, which they believe Hilary is too frail to provide.

In this scenario, many would assume that Hilary, as Brian’s next of kin, would have the authority to make the deciding decision on whether Brian should remain at home or move into a care home.   However, although the doctors and social services will take Hilary’s views into consideration, they ultimately will have the deciding vote and therefore may make decisions that are against what the person would have wanted, as in this case.  Therefore if you would like your family members to be able to make decisions when it comes to your healthcare, should you not be able to, then it is very important that you make LPA’s for your Health and Welfare so that you can provide them with the required authority to make such decisions on your behalf.

Scenario 3

Jeffrey and Jan own their house in their joint names and have all their bank accounts in their joint names.  They consider making LPA’s, however as they are both still young and their main assets are in their joint names they decide that they are not needed.  Jeffrey and Jan drive to work together and one morning are involved in a serious crash, leaving both no longer having capacity to manage their assets.  Following the accident, their son Adam, tries to help manage their finances however as he has no authority on the accounts through an LPA, every individual action that he wishes to take to help his parents is subject to a long and lengthy court order.

In this scenario, whilst a young couple with joint assets may be assumed to not require LPA’s, as the joint holder would be able to manage the assets should anything happen to one of them, there is unfortunately the possibility that something could happen to both of you leaving no one with authority to manage your assets.  Therefore it is still important even where there is someone who can currently assist with your assets, so that you can appoint another person who can step in and help you manage your assets should the worst happen.

Scenario 4

Anton is currently single, lives alone and all of his assets are held in his sole name.  He has a condition with his knees and, after requiring surgery, he is house bound for several months and unable to get to his bank.  He asks his friend to help him, however, as his friend is not appointed as his attorney the banks will not allow him to act on Anton’s behalf.  Anton therefore attempts to make an LPA to appoint his friend as his attorney, however, he is informed by the courts that it will be at least 12 weeks before the documents are registered and can be used.

In this scenario, as Anton is single it is less likely that he will have someone to financially support him should he not be able to access his own finances.  Therefore, it is particularly important that the LPA’s are set up so that there is someone with authority to help access his accounts on his behalf.  As shown, it is essential the LPA’s are created beforehand just in case they are required at a later date (as the documents require at least 12 weeks to be registered with the Courts before they can be used). The length of time it takes the Court to register the documents is often far too long when the documents are needed immediately.

Scenario 5

Sheila owns a property business, consisting of several buy to let properties that she is currently renting out.  Sheila unexpectedly becomes very unwell and is admitted to hospital, where it takes her several months to recover.  During this period she loses her capacity to manage her finances, including any decisions in relation to her business.  Unfortunately several of the rental contracts were due to end and the tenants have subsequently moved out, therefore leaving the properties empty and devoid of income.  However, with her lack of capacity Sheila is unable instruct agents to market the properties again.

In this scenario, as Sheila owns a business it is very important that she has preparations in place for someone to manage the business should she not be able to, as otherwise she may lose her income.  LPA’s can allow you to appoint attorneys to not only manage your personal financial assets but also any business assets too, and you also have the option to appoint the same or different attorneys to manage either or both of these areas.

If you would like more information on LPA’s please see our website via the following link:  Alternatively if you would like to book an appointment for a free initial consultation with one of our solicitors to discuss LPA’s further than please do not hesitate to contact a member of our team.