Help your clients take control of their future – explain the benefits of power of attorney
A serious accident or an illness that requires a lengthy stay in hospital, even in intensive care, can have long lasting physical and financial effects, including an emotional impact on your client and their family.
In situations where your client is at their most vulnerable it is important to understand what can be done in advance of these situations because they may not have the capacity to deal with their personal affairs. In more serious cases they may not be able to make decisions regarding medical treatment themselves.
When discussing your client’s needs it is helpful to be aware of the benefits of a Lasting Power of Attorney (LPA), which allows individuals to manage their approach to handing control to friends, family or a professional attorney. The LPA allows an individual to appoint an attorney to make certain decisions on their behalf in specific circumstances and gives them the option to specify when they wish to grant that control.
There are two different types of LPA: property and affairs, and personal welfare.
Property and affairs
The property and affairs LPA allows an individual to elect someone to take over decisions about how property and financial affairs are managed.
In some cases, clients may be in hospital and, even though they are able to make decisions for themselves, they may find it easier for someone to act on their behalf whilst they recuperate. For example, the attorney can access bank accounts, pay bills, access information on behalf of the individual, if necessary. The LPA remains valid even if the individual becomes mentally incapable, unless the power is restricted in some way.
A personal welfare LPA, meanwhile, allows the attorney to make decisions about an individual’s healthcare and welfare. These decisions include refusing or consenting to medical treatment on the individual’s behalf and deciding where they live. These decisions can only be taken when the individual lacks capacity to make them themselves.
It is possible under each LPA to appoint different people to make those decisions. Some clients may prefer to have a professional fiduciary to make financial arrangements but leave responsibility for their personal welfare to someone else.
In order for each type of LPA to be valid, it must be registered with the Office of Public Guardian and there are certain formalities to follow.
It’s important to bear in mind that LPAs can’t be created once a person has lost the mental capacity. Instead, an application to the Court of Protection for a Deputyship Order will need to be made and fees, forms, court hearings and medical reports may be required. All of this could be particularly difficult for those dealing with your client’s affairs at what would already be a very stressful time. It can also be a long process meaning the property and affairs and personal and welfare of your client may not be dealt with by those your client intended them to be.
Ensuring a LPA is in place can remove a huge amount of pressure on your client’s family and dependents. Discussions about the unimaginable are difficult conversations to have; however helping clients plan today and take control of their future by putting in place a LPA is one way of ensuring they are in control of who is making decisions in the future when they may not be able to.
Written by Gordon Andrews, Trust and Technical Solutions Manager
If you have a query about power of attorney for one of your Old Mutual Wealth clients, please speak to your usual protection specialist here.
You can also find out more by visiting the office of public guardian here.