It’s never going to happen to me? Or will it?
That’s what we sense when we are talking with many of our clients about Wills and Lasting Powers of Attorney or as us lawyers like to call them LPAs. Of course, it’s only natural when we are faced with our own mortality to want to put it in the ‘too hard box’. After all, you’ve got many years left before you have to take these difficult decisions…
Or have you?
This is a true story but with names changed. Peter and Theresa are like many couples we work with. Originally, they had started to talk to us about structuring their portfolio of properties and limited companies, so that it was tax efficient. As their two children were now grown up with their own children, Peter and Theresa were keen to make sure they were preserving their wealth for the future generations. Giving them the start in life they hadn’t had. Like many couples we had been discussing with them their Will and LPAs. But we never quite got around to actually pressing the button on this work.
After all, they had plenty of years left in them, and they both know’ what the other wants in terms of long-term care; DNR etc and have access to each other’s accounts, together with their joint account. And yes, they did have an (if they were totally honest) and ancient will in place. With our technical hats on, we could see that the will didn’t maximise reliefs. But that could be sorted at a later date if all went well. They also felt that the £1500 to set up the LPA was probably unnecessary right now and the money best spent on helping their children financially right now. After all, they had most things documented. The LPA was just the dotting of the ‘I’s and crossing of the ‘t’s.
Sadly, last Tuesday Theresa had a significant stroke and is now in hospital. Peter, her husband, has no access to her due to COVID-19 and it would appear whether temporarily or permanently she has lost mental capacity.
Peter, as next of kin, has provided instructions as to his wife’s care and what she wants. The hospital have confirmed that although he is next of kin as there is no Health and Welfare LPA in place they will have to refer the matter to the LA who now have sole control over her care and the party who have ultimate say in how she can be cared for. The LA have no obligation to notify the husband about the decisions they are making and, in a time, when access to the hospital and remote working is commonplace, trying to find out what they are considering as a care package is very stressful. (And that’s if someone will answer the phone….) Surprised?
There is a common misconception that the ‘next of kin’ can decide matters of health and welfare without an LPA in place. They cannot. Cases have arisen where Local Authorities have obtained warrants to remove aged and infirm parents from the homes of their adult children as they do not consider it in the parent’s best interests to be there. Subsequent hearings have seen those same parents returned but the stress of the situation on all parties is enormous. See the case of Betty Figg – http://www.thepoapractice.co.uk/relevant-press
Without an LPA the ONLY option for relatives of the person who has lost capacity is to make an application to the Court of Protection to be appointed as Legal Guardian. This is a lengthy and costly process during which time the ‘Donor’ remains under the care of the Local Authority.
It is at least 4 times more expensive to apply to become a guardian than it is to apply for an LPA and the Court will NOT grant the same wide-ranging powers that a Donor may. Regular court attendance is required, and all large expenditure must be approved. It is exceedingly onerous, time consuming and for the lay person unpaid, so if the applicant has a full-time job, it is very stressful.
If you have a joint bank account with anyone who loses capacity the Banks can and will freeze the account until an LPA can be produced or a guardian is appointed. Again a common misconception that you can just continue using the account as normal.
If you run a property business how does it operate:
If you own properties jointly with your Partner either as a Partnership or Ltd Company what does the Partnership Agreement/memo and Arts say about loss of capacity. Can the business continue to operate?
Does the business have bank accounts in your sole name or the name of the business? How can they be operated if someone loses capacity?
Are you currently raising finance to support or develop the business? How is this being done? What happens if capacity is lost?
Are you in the process of buying or selling properties? How would this be affected?
How are your true wishes for care reflected on paper? If they are simply ‘known’ by someone this is not enough.
Do not consider that loss of capacity is the sole preserve of the elderly dementia sufferers. Some COVID-19 patients that are in isolation or on ventilators means they are unable to operate their businesses. Not only that, but freak accidents can change lives overnight – no one ever expects it to happen to them – until it does. This is the very sad case of PC Paul Briggs https://www.bbc.co.uk/news/uk-england-merseyside-38710427 For a chat about the real impact on you, your family and business if you do not have an LPA in place, whether for your health and welfare, your finances or for your business then give us a call.