The importance of having lasting powers of attorney in place cannot be underestimated. There are two distinct types of power of attorney, one for your financial affairs and one for your health and welfare.
In today’s blog post we look at the potential downfalls of not having a power of attorney in place and how it can bring additional financial and emotional stress for a family at an already difficult time.
Bringing Common Sense Into The Equation
Having a lasting power of attorney in place for both your financial affairs and for your health and welfare ensures that your wishes are taken into account, even when someone else has to act on your behalf. Without lasting powers of attorney in place your family, even a long-married spouse, have no legal rights to act on your behalf, they only have an opinion in the eyes of the law.
Property and Finance
Let’s look at property and finance first and take the example of a married couple who have a joint bank account. Should one half of the couple become classed as medically or mentally incompetent, and this can sometimes come down to something as simple as a medication they are taking, if there are no lasting powers of attorney in place then all their financial accounts – including joint accounts – will be frozen by the court of protection.
That could mean a husband or wife – who is the joint holder of that account – might be locked out of the account and when they go to the cash point they find they are unable to withdraw any money. They would then need to contact the office of the public guardian to gain access to their own money. At that point restrictions might be placed on what they can spend, for example the maximum they can spend is £20 per day and the most they can spend via cheque is £200.
The next step would be for them to apply for a deputyship. A deputyship is where you are allowed to apply to the court to say you are going to run your husband or your wife’s account on their behalf. This can cost several thousands of pounds and the current processing time to put this in place currently stands at 10 months.
Once a deputyship is put in place you can then run the account for the person concerned, always acting in their best interests, but you will be audited by the Office of Public Guardian once or twice a year and in the process they will charge you an ongoing annual fee of around £600. That is a lot of wasted time and money and a lot of stress which could be avoided by putting a power of attorney in place ahead of time.
Alternatively, if you have put a lasting power of attorney in place for your financial affairs the situation would be very different. Your accounts would continue to run as normal, they would not be frozen and your husband, wife or other person named as an attorney would not have someone they have never met before telling them what they can spend.
Even with a joint account between spouses, where usually we consider half the money belongs to each partner in the couple, in effect you both own 100% of the assets in that account. So for ease, let’s say there is £100k in the joint account. The courts will not look at it as though £50k belongs to one spouse and £50k to the other, they will say that either the husband or wife is incompetent right now and therefore we are going to assume that all the money belongs to that person and therefore freeze the entire account. As you can imagine this will cause major problems with payments, bills, wages and ultimately can cause great distress for the whole family. There is a process to sort the situation out, through a deputyship, but it is a lengthy and an expensive one.
Health and Welfare
The newer addition is the health and welfare power of attorney and this is something that is often less talked about than the financial power of attorney. It does however have wide ranging powers and it’s important to understand how the law works in the UK so that you can be prepared.
Let’s take as an example a family member – maybe a husband, wife, nan or grandad – who is in hospital and who the doctors wish to undertake a life sustaining treatment or a very invasive procedure on. Now the family members may know that this treatment is against the wishes of the individual concerned and they say “Please don’t do it, they do not want it” but because they don’t have a lasting power of attorney in place for health and welfare, the family has no more than an opinion in the eyes of the law, they have no legal rights.
It would not matter if this was a husband and wife who has been married to their partner for 60 years and who wants to speak on behalf of their spouse. Without a lasting power of attorney in place for health and welfare, they have no legal rights whatsoever – they only have an opinion. The overall rights and legality stands with their health professionals and the state. Obviously this can be very stressful for family members who have to watch their loved one go through a procedure that they know they do not want.
The solution is to put a lasting power of attorney for health and welfare in place ahead of time. This will give the person named as your attorney, the person who knows you best and who you trust, the ability to talk on your behalf.
This health and welfare power of attorney is important in many different scenarios, it doesn’t just come down to health issues but is important for the welfare of a person who isn’t able to communicate their own needs for whatever reason. Let’s take as an example your Nan who is in a care home. Now you go to the people who manage the home and say “My Nan likes her hair done every other week. Could you make sure that happens, please. She likes this food and not these foods and we love these colours, but we hate these colours, so could we change the colour scheme of the room, please.”
If you had powers of attorney for health and welfare, you would be able to say that and your requests would be complied with, but without it, you wouldn’t be able to make your Nan’s wishes known.
In a wider context if you disagree with any treatment at all or any decision that’s being made on a loved one’s behalf, if you don’t have powers of attorney, then to overturn something you would need to go to court and request a Judge pass that decision making ability to you. That however is at your own cost, a cost which averages £5k per hearing. Plus, with health and welfare issues you cannot get over-riding rights given to you by a Judge – they can only give you the ability to make that particular decision you have brought before them on that day, not any future decisions. So for future decisions, you would need to go back to court, again at your own cost which can’t be reimbursed to you, and argue your case. As you can imagine this would get very expensive and very stressful, very quickly.
Making Your Wishes Heard
Whether it’s a financial issue or a health and welfare one, families will be going through a very emotional and stressful time. It’s a time when you don’t need someone telling you what you can and can’t do financially or making decisions against what you see as the best interests of your loved one.
Putting lasting powers of attorney in place, before they are ever needed, brings common sense back into the room. What it effectively does is allow your attornies to speak on your behalf and when they do the people they’re speaking to have to respond as if they’re getting that instruction directly from yourself.
This is a complex area and the information provided here is for informational purposes only and not intended or to be taken as legal advice. To make sure this is appropriate for you please seek advice and contact us.