The seemingly relentless rise in dementia is one of the fastest growing health issues in UK society. This category of disease combined with an older population means that it’s never been more important to get your affairs in order as early as possible.
Michelle Monnes Thomas (right) - Alzheimer’s Society Dementia Friends Champion
But if dementia does take hold, at what point do you hand over responsibility to a nominated person and grant them Power of Attorney over your financial affairs? And what alternatives do you have?
An LPA (or Lasting Power of Attorney) is a document that allows you to appoint one or more people to look after your affairs and make decisions on your behalf when you are no longer able to. These nominees are referred to as attorneys, although they do not necessarily have to have legal experience to qualify, and are usually close relatives or trusted friends.
There are two types of LPA:
A Health and Welfare LPA can specify what kind of treatment and palliative care you want if you have a degenerative disease like dementia, whether you should be moved into a care home, and specifics concerning your daily routine.
A Property and Financial Affairs LPA often gives your attorney access to your finances to manage your affairs when you are unable to. They will be able to access your bank accounts, pay bills, and arrange the sale of your property or be able to rent your property if you go into a care home.
LPAs must be registered with the Office of the Public Guardian, which can take up to 10 weeks to complete. LPAs are made by a person while they are still capable of making decisions concerning their future care, financial matters, and how their estate is to be managed once they are no longer capable of doing it for themselves.
There has to be a degree of trust between the person living with the dementia and the person appointed to take responsibility for the instructions laid out in the LPA, whether that’s a financial or a health and welfare decision.
There is an alternative to an LPA in the form of a Court of Protection appointed deputy.
These are usually appointed on behalf of a person with dementia once they have lost the ability to appoint their own representative.
However, this is rarely offered as an option to an LPA, primarily because in the majority of cases an LPA has been arranged long before a person with dementia loses the ability to make decisions.
As long as the person nominated to look after the stipulations laid out in the LPA has the trust of the donor, and the donor is mentally capable of making the decision to nominate a person as their LPA attorney, there shouldn’t be any problems.
A court-appointed deputy is only really appropriate after a person with dementia has lost the ability to make rational decisions for themselves, or there is no one to act as an LPA nominee. They have to provide a full list of assets and annual accounts, as well as a security bond.
Sort things out sooner rather than later
As power of attorney is often agreed upon before dementia really starts to affect the cognitive ability of a person, it can be months or even years before the power of attorney status really comes into play.
This is why it is so important to sort out not only your will, but any LPAs as early as possible, especially after the diagnosis of a degenerative disease.
LPAs can bring families closer together, as they ensure the person is cared for properly, and that those granted the Power of Attorney are fully aware of their responsibilities from the outset. It also gives the person making the LPA peace of mind that their wishes will be carried out.
Michelle advises on a range of private client related matters including Wills, Powers of Attorney, Trusts and Estates. She is also part of the Community Care team, which advises on challenging care decisions and reviewing assessments for care and long-term care planning.