It's important to know that a Lasting Power of Attorney is not only for the elderly.
You need to set them up when you are healthy and capable.
It will only come into force, once you can no longer make decisions or (for the property and finance type) when you choose.
Some argue a Lasting Power of Attorney is as important, and in some circumstances more important, than making a will!
To understand why - here is what happens after an accident, meaning you can no longer make decisions for yourself, without a Lasting Power of Attorney:
The Court of Protection steps in and assesses if you are able to make decisions pertaining to your health and welfare as well as any financial and property related issues.
If they deem you are not able, the Court can appoint somebody who will make decisions for you. This is not always a family member, as the Court can decide that they are not suitable for the role. Sometimes a local authority takes over this role. As you can imagine, this can make life extremely difficult, lengthy and costly.
There are costs associated with applying to the Court of Protection, it is not a free service:
- £400 per person and per type of application (if your spouse and your child want to apply to both manage your finances as well as any health & welfare decisions, this would be 4 x £400 = £1600)
- £500 court hearing fee, if the court decides that your case needs a hearing
- £400 appeal fee, if you want to challenge a decision the court has made
- £100 initial assessment fee per person applying
- £35 - £320 annual supervision fee (this depends on the value of the assets you manage - £35 applies to anything under £21,000)
- A security bond based on the assets you are looking after . For example a bond for £250,000 would be around £500 - this is payable annually
- £130 - £500 for an initial medical assessment
The cost for the initial procedure would be £2965 in the "best case scenario" - ie. this requires low annual supervision by the court and a low fee for the initial medical assessment and no appeals to the court.
The ongoing annual costs to your family for this example would be £535 for as long as you are incapable.
In addition to the costs, each year, the people appointed to look after you, must fill out a lengthy form, detailing what decision they have made on your behalf, a minimum of 21 pages for finances & property and 8 pages for health & welfare. Each year these must be submitted to the court of protection.
A Lasting Power of Attorney can save you a lot of paperwork, time and money and gives you peace of mind. It lets you appoint a trusted person to look after your finances, property and health & welfare while you are not able to. They will have the right to make decisions on your behalf. There is a one off registration fee per type but no ongoing fees and no involvement by a public body. Everyone over 18 should have an LPA!