We explode some urban myths surrounding a Lasting Power of Attorney and explain why we should all have one
One of the common features of being a lawyer is the moment when you meet someone and having found out what you do, they start the conversation with, “So, I read on the internet that …” or, “Someone I met at a party told me that …” There are so many “urban myths” about the law in circulation and it is our job to cut through the mystery and present the legal facts.
Take Lasting Powers of Attorney as an example. They have been in the news a lot recently, but there is still a feeling that these documents are only required once you are elderly and have some kind of dementia. I’m afraid to say that if you only think about a Power of Attorney at that point, there is every chance it is already too late!
There are a multitude of reasons why everyone should have an LPA in place, regardless of age or health. I have one because I get in a car most days. If I have an accident and end up in hospital, I want to know that someone has the authority to be able to access my bank account to pay my mortgage and other essential bills, and indeed to pay for my ongoing care if that is required.
So why else would you need a Power of Attorney? Are you married? Urban myth SPOILER alert coming up here …
Just because you are married to someone, you have absolutely no automatic rights whatsoever to deal with their assets in the event that they lose their mental capacity. So, if your spouse were to suffer some unfortunate accident or sudden illness which temporarily or permanently affects their capacity to manage their own financial affairs, you could not go to their bank and ask for funds to be released from their account. Nor could you sell a jointly owned property. To do all of this would require a valid registered LPA or a Deputyship order from the Court of Protection.
Whilst you’re at it, think about the other people that you have a responsibility for. Do you have young children? Do you have a child with a disability? Do you own a business which employs other people? People who rely on you to run a payroll or sign a cheque which allows them to pay their mortgage every month?
I am sure that most responsible business people have some kind of keyman insurance in place that would pay out if a key person in the business died. But what happens if your key person didn’t die but suddenly lost mental capacity? What if that key person was you? As a business owner, you could put an LPA in place that appoints a trusted business colleague, your solicitor or accountant, or a family member and is limited solely to your business affairs. You could then have a separate LPA which deals with your personal financial affairs.
Someone wise once said. “No man is an island”. No woman is either. Many of us have responsibilities for someone else in one way or another. An LPA is one of the essential tools to help with those responsibilities, and one that everyone should have in their kit.
If you would like to discuss the benefits of making a Lasting Power of Attorney call us on 01272 372128 or email [email protected]