WHAT HAPPENS IF I DON’T HAVE LASTING POWER OF ATTORNEY

It can be difficult to think of a time when you may not be able to make your own decisions but this happens to thousands of people every year and not just as a result of the ageing process. A sudden accident or illness can also mean you lose your ability to look after yourself but, of course, no one thinks it will happen to them.

But what if it does?

If you have already discussed this issue with your family and organised a Lasting Power of Attorney then you have done the sensible thing. You have already nominated the individual that you want to look after your affairs in the event of your incapacity.

If you aren’t sure about what protection a Lasting Power of Attorney offers, there is more information here:  

But what if you haven’t?

If you haven’t, and you are incapacitated, someone will need to make a court application in order to manage your financial affairs. The basic costs of applying to the court are approximately £2,500 (which your family may have in a savings account) and usually takes about 8-12 weeks. If your court application is successful, a deputy will be appointed.

This is a more expensive and time consuming way of achieving a similar result however that may not be the major issue; consider not only the basic elements of both time and money involved when you don’t have an LPA but the IMPACT on your family.

Peter, is a 28 year old married father of two children with enough income to support his family. His wife, Mary, is a stay at home mum with no income of her own. They have a joint mortgage, as well as joint current and savings accounts. Child benefit, is in Mary’s name and paid into the joint current account. For safety, they are joint signatories on them all.

On the way to work one day, Peter is involved in a car crash suffering serious head injuries. After one week in hospital, his family are told that he will not recover and will need constant care for the rest of his life.

All bank accounts with Peter’s name on are frozen; Mary can’t access any money or pay any bills until she makes an application to the Court of Protection. To do this will cost, as we said above, about £2,000 and will take at least 8 weeks. But Mary can’t access any of the bank accounts.

The only income that Mary has in her own name is the child benefit. However, in order to access this she has had to open a new bank account and liaise with the child benefit department in order to have the payments deposited in her new bank account.

To get any further than this, Mary is going to need the help of family and friends.

Happily, in our example, Mary is lucky and family members are able to provide the lump sum required to apply to the Court of Protection as well as a very small monthly income. However, through no fault of her own, Mary has rapidly found herself in very reduced circumstances.

After a further 14 weeks, the Court of Protection rules that Mary can be made deputy however she is required to take out insurance against her possible mismanagement of her husband’s assets. This has to be in place prior to the court signing the order and the fee is payable in advance.

Hopefully, Mary can rely on family and friends again.

If she is successful, Mary is now still only the deputy. She must keep detailed accounts and make regular reports to the court about her financial management. There will, of course, be court fees and costs for this.

To finally be able to have access to her own bank accounts has taken Mary about 14 weeks, cost her family and friends at least £3000 and left Mary with the onerous task of submitting financial reports to court. She has also had to deal with the not inconsiderable distress of her husband’s condition.

Compare this to the cost of arranging Lasting Power of Attorney. We plan 2 meetings with you, each an hour in duration, during which we can complete all the paperwork necessary to ensure you, and your family, do not have to face a similar situation to the one above.

One contact. One solution. One fee.