The Importance of Lasting Powers of Attorney
Posted on 23 May 2019 by Adam Hillier
“Err Mr and Mrs [Insert appropriate surname], do you mind if I ask if either of you have made Lasting Powers of Attorney?”
Mr and Mrs [Insert appropriate surname] often respond with one of the following:
• “Do I really need to do one? I’ll save my money as I probably won’t ever need to use it!”
• “Maybe I’ll do one if I need to in the future – shall we just focus on the Wills for now.”
• “No, the kids can sort it all out if need be as they are the executors in my Will!”
We find that there is still much misunderstanding when it comes to how important a Lasting Power of Attorney can be for assisting the individual and their immediate family.
The following is my “worst case example” from practice which I often describe to clients when they are considering Lasting Powers of Attorney. It is a true story although I have obviously changed the names for the purposes of this article.
A few years ago now I was instructed by a brother (“Bob”) and sister (“Beryl”) to assist them with the sale of their mother and father’s house. Now I’m not a conveyancer, far from it, so why was I asked to get involved? Well, the parents were both in their 90s, living in separate care homes and physically unable to deal with the sale. Their children were trying to raise money to pay for the care costs by selling the family home on their behalf. Seems so straightforward!
ME: “Do they have Powers of Attorney?”
THEM: “No, they never got around to it….. Is that going to be a problem?”
ME: “Well it will probably hold the sale up a little. We perhaps won’t be in the position to complete for say two or three months. In order for you to act on their behalf, they’ll need to instruct me to prepare and sign Lasting Powers of Attorney that appoint each of you. We then send these off to The Office of the Public Guardian so they can stamp, seal and then deliver back to us the registered documents….. I assume your parents still have capacity?”
THEM: “Mum definitely does but Dad….”
And then down the rabbit hole we went!
Their mother although frail still had mental capacity. I was able to visit her at the care home, take instructions and within a week her Lasting Power of Attorney for Property and Finance was signed and off for registration. It would arrive back a couple of months later thus allowing Bob and Beryl to sign on behalf of their mother with regards to her half share of the property.
Sadly father’s situation was far more problematic. He no longer had capacity, in fact he was now residing in a secure dementia care unit. I could not take his instructions to prepare a Lasting Power of Attorney and so had to proceed instead down the Court of Protection route.
Suddenly a waiting time of two to three months is extended to nine to ten months. The costs for Bob and Beryl also rocket upwards. The Solicitor fees to prepare the application and deal with the process, the Doctor’s fees to prepare a medical report and the Court of Protection fees to submit the paperwork came to a combined £3,000 and all because father had left it too late to prepare a Lasting Power of Attorney.
Finally, after much frustration and a few buyers who were put off, the Court Order came through. It appointed Bob and Beryl to act specifically in the sale of the property on behalf of their father, whilst he was alive. As such they would be able to now make decisions about the sale of the property as if they were him. It did what Mother’s Lasting Power of Attorney achieved all those months earlier but was more restrictive in its flexibility. Nonetheless, now, finally, alongside their mother’s Lasting Power of Attorney, the sale could be completed!
Father died 3 days later.
The power under the Court Order died with him and the previous eight months had been for nothing. The property simply passed absolutely to mother under his Will and the sale was finalised using just her Lasting Power of Attorney.
A crystal ball would have been a marvellous thing ten months earlier….. or perhaps even better, just a couple of previously registered Lasting Powers of Attorney in the drawer at home!
Posted in: Elderly & Vulnerable Client Affairs