A recent survey has revealed that a staggering number of people have granted relatives informal access to their bank accounts.
A Lasting Power of Attorney (LPA) is a formal document by which an individual can give one or more people access to their financial affairs and the power to spend money on their behalf.
It is relatively simple to set up and register, but it seems that many older people are choosing to give others informal access to their bank accounts instead.
A recent survey carried out by the Co-operative Society found that a quarter of over-45 year olds have been given access to the bank account of someone other than their spouse.
While this may seem like an easy solution to allow people to help out older relatives, the truth of the matter is that there are serious implications for all involved.
Why granting informal access to a bank account should be avoided.
Firstly, there is no protection for the owner of the bank account. The access will not be supervised in any way and it may become increasingly hard for the person granting the access to keep a check on their finances.
It offers great scope for abuse by the person to whom the access is granted. While they may start out with good intentions, the temptation to misappropriate funds might be hard to resist.
If the person owning the bank account dies, the administration of their estate may be delayed as investigations are made into any improper use of funds by the person with access.
There is also room for suspicion by other relatives if there has been no supervision over years of informal access.
The advantages of using a Lasting Power of Attorney.
By using a formal document to give someone official access to your financial affairs, everything is kept above board and visible.
There is far less scope for abuse as the document is registered with the Office of the Public Guardian (OPG) once it is put into use and the OPG will supervise the attorney’s activities.
If the OPG suspects that the best interests of the person granting the LPA are not being observed, they have the power to investigate. They can remove the attorney and appoint a replacement if they find any impropriety.
How to set up a Lasting Power of Attorney
An LPA can be completed before it is needed and then kept until the time that you decide you need an attorney to help with your affairs, when it will be officially registered.
To speak to one of our expert team about setting up an LPA, call us on 01243 216900 or email us at email@example.com.
There may be times in your life when you’re unable to manage your own personal affairs. Sickness, injury, old age and short-term incapacity can leave you unable to make decisions about your wellbeing.
While a daunting thought, in advance of these circumstances, you can grant legal authority to someone you trust to make a decision on your behalf.
This is done by completing a Lasting Power of Attorney (LPA) and it legally authorises a designated individual or individuals to take care of your personal matters for you.
Two types of LPA
You can apply for a Health and Welfare LPA or a Property and Financial Affairs LPA. Often, both are applied for together, allowing the attorney to make a decision in both areas and protect the overall wellbeing of their friend or family member.
The Health and Welfare LPA covers matters around your physical care and welfare. Your attorney may be required to make important decisions about any medical treatment you are given, your housing, your general care, and also whereabouts you are cared for. So it’s essential that you select a person you trust, and who will advocate for you when they are required to speak on your behalf.
When it comes to the Property and Financial Affairs LPA, the purpose of this agreement is to make a decision on your financial wellbeing and manage your finances day to day. This could include being responsible for your home, any financial assets, as well as your bank account and savings. It’s important to select someone who will manage your financial affairs soundly.
How to choose your Attorney?
Becoming an Attorney is a big responsibility, and it’s essential to choose someone that you trust. Whether Financial, Welfare or both, you need to be assured that they will behave with integrity, advocate for you when you are unable to, and make often difficult decisions that are in line with your values and instructions (which you can set out in your LPA). It’s worth noting that you can choose more than one Attorney and prepare a stand-in in the event that your original choice is unable to or fails to act.
What is a Certificate Provider?
A Certificate Provider is required to counter-sign your LPA. This protects potentially vulnerable people from being coerced into designating Power of Attorney to someone against their will. Typically, friends, neighbours or the medical community can provide this role. However, they are required to have known you for a minimum of two years.
How do I complete the paperwork?
It’s always smart to consult with a lawyer before you begin your LPA process. A lawyer will also ensure that your paperwork is registered with the Office of Public Guardian (OPG).
To find out more, why not download our “Free Guide to Lasting Powers of Attorney” or talk to one of our experts to learn how we can help you to create and register either or both kinds of LPA. Call us on 01243 216900 or email us at firstname.lastname@example.org.
According to the latest figures, from the office of National Statistics, while they are rising in popularity, fewer than 1 in 10 adults have made a Lasting Power of Attorney (LPA), suggesting that the majority of people are simply not prepared for later life.
An LPA is one of the best ways to protect yourself and your wishes, should you become unable to make financial or health decisions for yourself.
There are two kinds of LPA, a Property & Financial Affairs LPA and a Personal Welfare LPA. Both deal with very different matters.
However, according to the latest figures from the Office of the Public Guardian, there were only 1.4 million Financial LPAs registered in 2016, and 600,000 Health and Welfare LPAs.
People are living longer than ever before
In the UK, the number of people who reach their 85th birthday is expected to double by 2045. At the same time, the Alzheimer’s Society predicts that there will be more than two million people with Alzheimer’s by 2051.
As such, the prospect of being unable to make decisions in later life is one which more of us will have to consider. So, it is more important than ever to plan for later life.
However, while the number of LPAs is rising quickly, many people are failing to make a LPA because they are unsure about what it involves and why it is needed.
You will find some very straight-forward information from Age UK here.
The importance of later life planning
With an increasing number of seniors set to live on into their eighties and nineties, we are likely to see a corresponding rise in people who are no longer able to make decisions for themselves. And, even where people trust that their family will look after them, without any guidance this can be hugely stressful for those left to do so (and cause disagreements between those closest to them).
An LPA can go some way towards managing this problem. With an LPA, you appoint a trusted relative or friend to become an ‘attorney’ and look after your financial affairs, or make decisions about your care and medical attention when you are no longer able to do so yourself. You can also include specific instructions to help them make decisions you would approve of.
Don’t leave it too late
However, when it comes to making sure you are fully protected, planning in advance is crucial. If you put it off indefinitely then you run the risk of not being in a fit state to understand and sign an LPA.
To find out more and to protect yourself if you become unable to manage your financial affairs, and to make informed decisions about your long-term health arrangements, take a look at our Estate Protection services or speak to one of our expert team. Call us at legalmatters on 01243 216900 or email us at email@example.com.
If you applied to register a power of attorney in England or Wales from 1 April 2013 to 31 March 2017, then you may well be owed money from the Office of the Public Guardian.
The background to this is that the Office of the Public Guardian – the people you paid a fee to in order to register a power of attorney in England or Wales – is not supposed to make a profit. So when the registration fee per power of attorney was reduced from £110 down to £82 fairly recently, they had to admit they’d been making a profit on the fees for some time, hence the reduction in the price of the fee.
But what about the profit they’d been making in years gone by?
Well, they’re not allowed to “keep” that profit. So, anyone who applied to register a power of attorney between the above dates, can go online and register a claim. Although the payment will only be made to the “donor” (which is the person who made the LPA), if you’re a an ‘attorney’ (someone appointed by the donor in an LPA or EPA to make decisions on their behalf) or have been formally appointed as a replacement attorney, (and are now able to make decisions on the donor’s behalf) then you can make the online claim. If the donor has died, then only the executor of the will or administrator of the estate can claim a refund.
Filing the claim should only take about 10 minutes online and they’ll let you know in about 12 weeks as to whether you’re claim has been successful. You must however claim your refund by 1 February 2021.
When it doesn’t pay to improve efficiency
The Office of the Public Guardian said that they hadn’t ‘fessed up to it before because the volume being processed hadn’t initially produced a profit. But now that they have a greater number of powers of attorney going through the system and they haven’t had to increase the number of staff to manage them (because it’s a heavily computerised process) this has led to them making a profit.
What would you do with £34…
The refund amount ranges from £34 to £54, depending on when you applied to register the power of attorney. It might not be an earth-shattering amount, but what would you do with yours?
Find out more about it here: https://www.gov.uk/power-of-attorney-refund
For further information or to arrange an appointment to discuss any aspect of Wills, Lasting Powers of Attorney and Trusts, please call one of our expert team at legalmatters on 01243 216900 or email us at firstname.lastname@example.org.
A Lasting Power of Attorney or LPA is one of the best ways to protect yourself and your wishes should you become unable to make financial or health decisions for yourself.
But, all too often people fail to make an LPA because they are unsure about what it involves and why it is needed. Here are the most common misconceptions about LPAs:
I don’t need an LPA because I am fit and healthy
Our individual circumstances can change in an instant. People lose mental capacity for many different reasons including accidents, strokes and heart failure.
So, rather than waiting until you are losing capacity to make an LPA, it makes sense to do so when you are still able to understand and sign the document yourself. Don’t leave it until the moment an LPA is needed as that could be too late.
I have a Will so I don’t need an LPA
While a Will sets out what happens to your estate after you die, an LPA deals with what happens if you can no longer make decisions for yourself while you are still alive. As such, they are very different documents that deal with very different circumstances. Both are needed to protect you and your assets.
My family will look after me, so I don’t need an LPA
Even if your loved ones all agree on how best to look after your finances and health (and this often isn’t the case), it can be hugely stressful for them if they don’t know what your wishes are. An LPA reduces the likelihood of disagreements between those closest to you and gives them the confidence that they are doing what you would wish. For example, you can decide whether your attorney has the power to accept or refuse life-sustaining treatment on your behalf or set out what you would want.
My family will make decisions that I don’t approve of
With an LPA, you not only retain the right to look after your own affairs for so long as you are capable, but you can also limit the powers an attorney is given, and, include specific guidance to help them make decisions you would approve of.
I already have one LPA, I don’t need another one
There are two kinds of LPA: a Property & Financial Affairs LPA and a Personal Welfare LPA. Both deal with very different matters and having just one will not cover all the different decisions you might need to be made for you.
I have a joint bank account, so my husband/wife/partner can look after our finances
Even if you hold a joint account, you could face issues accessing your cash. In fact, banks often freeze accounts to protect the vulnerable person until they see a copy of a registered LPA.
To protect yourself against becoming unable to manage your financial affairs, and to make informed decisions about your long-term health arrangements, speak to one of our expert team at legalmatters. Call us on 01243 216900 or email us at email@example.com.
A living Will (or an advance decision as it is also known) allows you to make a decision about refusing medical treatment in the future. It means that if you are ever in a position where you cannot communicate your wishes, medical staff know what they are. This can even include a decision not to receive certain life-sustaining treatment.
An advance decision is a legally binding document. However, if your family or medical staff are unaware you have prepared one, then your wishes may not be honoured.
This was the case for Brenda Grant. Brenda suffered a stroke in 2012 and although she had prepared an advance decision stating that she did not want certain treatments, she was fed artificially for two years.
In this case the hospital was in possession of the advance decision but had misplaced it.
Whilst Brenda had informed her doctor of her decision, she had not told her family, so it was only when her doctor flagged it up two years later that her wishes were finally respected.
If she had chosen to prepare a lasting power of attorney (LPA) instead, this situation could have been avoided.
An LPA for health and welfare covers a wide range of issues relating to the care of an individual if they don’t have the capacity to make decisions for themselves.
Though it is a legal document just like the living Will, it must be lodged with the Office of the Public Guardian in order for it to be recognised. This ensures that it will be recorded on a national and searchable register. One or more attorneys (normally family members) must be appointed to make the decisions, so in the event of you not being able to make them yourself, there is less risk that your wishes will not be known.
An attorney must make decisions that are in the best interest of the donor (the person who the LPA relates to). The donor can detail what their preferences are and list any instructions for specific circumstances.
Whilst it is possible to have both a living Will and an LPA for health and welfare set up, the latter will take precedence should a conflict arise.
At legalmatters we’re always happy to discuss our clients’ needs and to answer their questions. Call us today on 01243 216900 or email us at firstname.lastname@example.org.
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The use of the Lasting Power of Attorney (LPA) – where an ‘attorney’ is appointed to make certain decisions on your behalf should you reach the point where you are unable to make them yourself – has increased significantly in recent years.
However, it would be a mistake to view LPAs as purely a tool for individual use. A business or commercial LPA can prove just as useful if you happen to own your own business.
What would happen if you were injured or fell seriously ill? It may be that you have company documents such as a partnership deed or shareholders agreement to say who would take over the running of the company but who makes shareholder decisions i.e. who would be in charge of those strategic decisions on which the future of the business will depend?
While there may be some form of informal understanding among you and your senior team of who would take on that responsibility that may not be enough if you are also a shareholder in a business. Without some form of legal structure in place, there may be issues with them accessing the business’s bank accounts, arranging contracts with suppliers, even paying the salaries of the existing staff. It may not take long for the company to end up in serious difficulties.
Writing a business LPA is an excellent way to tackle this, ensuring that an appointed attorney is in place to step in and maintain continuity should you no longer be able to fill that role.
Picking a suitable attorney for a business LPA is not altogether different to selecting one for a personal LPA. You need to find someone who you trust, who is reliable and who has a similar outlook and attitude towards the business as you. It’s vital that you talk this responsibility through with them in advance though, so they are well aware of what will be expected of them should you fall ill or be involved in an accident.
As with a personal LPA, you can appoint more than one attorney, and specify that they act together in certain areas but separately in others.
Successful business owners pride themselves on being prepared for all situations, and sadly ill health is an important one to consider. Without making it clear legally that one of your team can step in and make important business decisions on your behalf, if you are no longer able to, it can put the very future of the firm in danger. Having a business LPA in place is vital.
To find out more about LPAs, contact legalmatters. Call us on 01243 216900 or email us at email@example.com to discuss your particular situation.
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The number of people making use of Lasting Power of Attorney (LPA) agreements has increased enormously in recent years. In fact, according to data from a Freedom of Information request, the number of LPAs has increased threefold since 2010.
This is undoubtedly a good thing; LPAs allow you (the “donor”) to nominate an “attorney” – perhaps a relative, a friend, a professional (for example a solicitor), your husband/wife/partner – to step in and make decisions on your behalf should you no longer be able to do so.
According to the Alzheimer’s Society there are currently 850,000 people in the UK living with dementia, and that’s expected to pass the million mark by 2025. As a result, an LPA is an excellent piece of planning, ensuring that someone you trust will be making decisions in your best interest should the need arise.
But what about the people that are asked to be an attorney? What does it mean for them?
- It’s a significant responsibility, so generally people are advised to select good friends or close relatives to be their attorney.
- As there may be a lot of administration involved – such as sorting out a care home, paying the care fees and keeping up to date records of the donor’s affairs – they need to be reliable.
- At all times, the attorney will be expected to act in the best interests of the donor, acting in accordance with the terms of the LPA.
- What’s more, the attorney cannot ask anyone else to take over their duties unless the donor has authorised them to do so.
- All of this will be unpaid, although the attorney will be able to claim reasonable expenses.
For anyone who’s been asked to be an attorney but believes that it may be too much for them, it’s important to speak to the donor in advance of the LPA being registered, when it would be too late.
LPAs can give donors peace of mind that someone they trust is making decisions on their behalf. However, selecting the right attorney may be more complicated than it first appears, and it’s vital that attorneys are clear on their responsibilities before taking on the role.
For help preparing an LPA – or to discuss the responsibilities of an attorney – call legalmatters on 01243 216900 or email us at firstname.lastname@example.org.
There are some fairly obvious legal words used when writing a Will but here’s a definition of some of those which might otherwise be misunderstood.
Administrator (sometimes administratix for a woman) – the person appointed by law to settle the affairs of someone who dies without a Will, so usually their next of kin.
Beneficiaries – this is anyone – a person, organisation or charity – left an inheritance (legacy, gift, trust) in a Will, or if there is no Will, under the intestacy rules.
Substitutional beneficiary – if a beneficiary dies before the person making the Will, a substitutional beneficiary will receive a gift in their place.
Bereaved – those surviving the deceased.
Crown or Treasury – this refers to the Government. If you don’t have a Will and have no next of kin, the Crown receives your estate.
Deceased – the person who has died.
Dependents – anyone who is cared for by the person making the Will. It normally includes children, spouse or elderly/sick relatives.
Executor (sometimes executrix for a woman) – the person or people you choose to make sure the instructions in your Will are carried out. You can choose a family member, a friend or a probate professional. An executor may also be a beneficiary of the Will.
Guardian – someone named in a Will who is appointed to take parental responsibility for any children aged under 18 at the time of the person making the Will’s death. They are known as a testamentary guardian.
Issue – this refers to a person’s lineal descendants. So their children, grandchildren and great-grandchildren. It does not include step-children.
Personal Representative – a general term for anyone in charge of administering a deceased person’s estate. It could refer to an executor or administrator of the Will.
Power of Attorney – a Power of Attorney may be given by executors and administrators to probate professionals to allow them to sort the Will without having to ask the executors to sign everything.
Trustee – a person or a Trust corporation (such as a bank) appointed to administer any Trusts created by a Will or arising under the rules of intestacy (so when there is no Will).
Testator (sometimes testatrix for a woman) – the person making the Will.
Child of the testator – in law this refers to children of the testator and includes legitimate, illegitimate, adopted and some surrogate children, but not automatically step-children.
Wards of Court – orphaned children with no appointed guardians are made wards of court. The court then decides what happens to them.
Witness – you must have two witnesses to see you sign your Will. You must watch them sign it and they must also watch each other sign it. You can’t choose a beneficiary (or their spouse) to witness your Will.
It’s important to be clear when drawing up legal documents. Legalmatters can help, we’re always happy to discuss your needs or answer your questions. Call us today on 01243 216900 or email us at email@example.com for further details.
Whenever Brits are polled on their most hated tax, without fail, one tax in particular always finishes top – inheritance tax. As a nation, we want to leave as much as we can after death to our loved ones and the thought of the taxman taking a slice evidently gets our goat.
Here are some simple and efficient ways to reduce your inheritance tax liability and to ensure you leave as little as possible to the taxman.
Making a Will
Did you know that failing to write a Will generally means you will end up paying more inheritance tax? Without a Will in place, your estate will be doled out according to the rules of intestacy, and chances are the taxman will help himself to a healthy chunk of it.
Did you also know that one simple way to reduce your inheritance tax via your Will is to leave some to charity, as these gifts are free of tax?
Understand the thresholds
Inheritance tax is charged on estates once they pass £325,000 in value, at a rate of 40% on everything above that value. However, couples are able to pass their allowance over in full to their partner – in other words, couples have a £650,000 allowance overall. If their combined estate ends up being worth less than that, there will be no tax to pay.
There is also a new additional element to bear in mind here. The ‘main residence’ allowance allows you to pass on your family home to a direct descendent, with an additional tax-free allowance included. For this year it stands at £100,000 and will increase each year until 2020/21 when it hits £175,000. As this allowance applies per person, it will mean a total tax-free allowance of £1 million for couples.
Even if you give something away, the taxman will still class it as being part of your estate if you die within seven years of making the gift. It’s a way of preventing people from handing over their home on their deathbed and avoiding the duty. Live longer than seven years and there’s no tax to pay.
However, there are certain gift allowances anyway which are free of tax. Everyone has a £3,000 limit each year, and what’s more this limit carries over to the following year if you don’t use it, to a maximum of £6,000.
On top of that you can give away £250 to each of any number of people every year, while further allowances are in place for wedding gifts to family members, friends and even political parties.
Write your life insurance policy in Trust
Lastly, it’s a good idea to write your life insurance policy in Trust, as this essentially separates it from the rest of your estate.
Usually your life insurance payout will be added to the value of your estate before it is paid out to your loved ones, meaning they have to wait a while in order to receive anything and then may have to pay tax on that payout too.
But writing it in Trust means it is viewed as being outside of your estate, ensuring that your loved ones get every penny and likely get the money quicker to boot.
If you need some help in making the most of your allowances, writing a Will, setting up Lasting Powers of Attorney or Trusts, then speak to a member of the team at legalmatters on 01243 216900 or email us at firstname.lastname@example.org to find out more.