Lasting Power of Attorney

Pat38493

I have read a few times recently and hear comments from Martin Lewis that you should set up a lasting power of attorney as well as a will.

Myself and my wife of course have wills that we have created, however, I was not aware until now that we could, or should, create a lasting power of attorney in advance of any serious illness or problem being diagnosed.

I would be interested to see whether others who are near or in retirement have done this?  As I understand it, this would make it much easier and less expensive for one or other of us to manage our affairs is the other loses mental capacity for whatever reason.

If you have done this, I would be interested to know whether you just did it by a DIY route or used a solicitor?

I am also not totally clear how this works in practice - once the LPA is in effect, does this mean for example that you can send it to organisations (e.g. banks) and then the bank have to treat you as if you are the joint account owner?

Also - can the person who allowed this revoke it on their own as long as they still have capacity?

Linton

Mrs L and I have PoA for each other.  This would enable us to access the other's bank accounts, investments and pensions if necessary. The PoAs were set up using the diy online  system without any problems at all so no need for a solicitor.

In practice one would register the PoA with the bank etc only when it became necessary.  This will involve confirming ID so would probably  need a personal visit to the bank.  This  may be less of a problem for organisation like utilities.   You may find that some banks are better at handling PoA than others.  Once the PoA is registered you can generally act as the donor in dealings with the bank or other organisation.  When I was an Attorney for my father the bank provided a card for his account in my name - you dont use the donor's card unless you have permission from the bank to do so.

Yes, PoA can be revoked whilst one has capacity.

Albermarle

We have just gone through the process. There are two types - Financial + Health & Welfare. So if you and a partner do both for each other, than that is four in total @ £82 each.
As above all done DIY and on line. It is relatively easy, you just need to be careful not to make mistakes. Then after paying you print off the forms and they need a number of different signatures, before you send them off. It then takes a few weeks to get them back/registered.
You are not supposed to use them whilst the donor has sufficient mental capacity to make their own decisions, so they will just be filed away safely, hopefully for a long time.
It is recommended to do them in advance as once someone loses mental capacity, you can not start the process anymore. Then you have to go via the Court of Protection, which is a long drawn out and expensive process.
So for £164 each you can save yourselves a lot of potential hassle, at a time when you least want it.

I guess the main problem is if you have nobody you can trust, so you would be reluctant to appoint anyone.

calcotti

The PoA process was, in my experience, easy to follow and the guidance included was clear and easy to understand.
https://www.gov.uk/power-of-attorney/make-lasting-power

badmemory

A POA can be of even more use than a will if the heirs are obvious.  Unlike wills they do not need a solicitor & last time I checked were only £82 each.  Imagine not being able to change something as basic as your broadband supplier who is doubling their price because it is in your partners name & they are not at the moment able to cantact them.  So if you are in a relationship you are looking at 4 x £82 to avoid this - forever.

eskbanker

badmemory said:

A POA can be of even more use than a will if the heirs are obvious.

Not really sure what you're getting at but POA ceases on the death of the donor, so isn't an obvious alternative to a will?

Golactico

Having done both types for my Mum, mother in-law and an elderly friend, I can also vouch for the fact that if you have the time and a bit of patience to read through what's required, negotiating the Power of Attorney application process is very achievable and will save you a lot of money on solicitors' fees. The bit where you really need to keep your eye on the ball is ensuring that signatures are obtained in the correct order and dated accordingly.

As advised elsewhere, a PoA and a will are two completely separate things and serve completely separate purposes.

squirrelpie

We keep meaning to set up LPAs and I keep delaying. We need to set up so we each are attorney for the other, with back ups of other younger relatives for the case that the other spouse is not capable for whatever reason. Is there a clear explanation of how to set up that arrangement anywhere? Oh and to include a relative abroad in the financial backup arrangements?

daveyjp

Its far easier to DIY now its online.

Once complete and printed you just need to go through each page, identify where a signature is required and note which person needs to sign each box.

You need the applicant, the people who will act, witnesses and a further individual who knows the applicant and confirms they entered into the POA knowing what it was and they weren't coerced.

german_keeper

We set up POA for our mum several years ago. About 3 years ago we (mainly me) had to go through the process to take over her affairs. We found that she had money all over the place but fortunately had records of everything. I probably dealt with about a dozen or so different companies and the process varied a lot.

Halifax were brilliant; original call answered almost straight away, the advisor was very pleasant, knowledgeable and professional (maybe luck of the draw); upload a copy of the POA document and that covered Lloyds and Scottish Widows too. The other extreme was Close Brothers who insisted on everything in writing and a copy of the POA document stamped and signed by a solicitor. But having said that nothing too onerous and overall the process was fairly painless and I was quite impressed with all the companies and public sector organisations I dealt with. On an ongoing basis so far all seems to be working like clockwork.

The only problem we have really had is highly unlikely to affect many. Mum was sectioned in March 2020 and following that has been fully funded under Section 117 as she "is a danger to herself or others". Her monthly income is about £3k and her normal living expenses maybe about £500 per month. This is mainly just petty cash for the Nursing Home when they take her out and birthday and Xmas gifts to family. 

So of course IHT has reared it's ugly head and we are maybe a couple of years away from this becoming an issue if she is still with us. We have looked into gifts from normal income and a good friend of my sister, who happens to be a solicitor who specialises in this area, has confirmed that our situation fits the criteria. However the issue is with the POA. It doesn't give you carte blanche to do whatever you want; it is about doing what you believe the individual concerned would have done if they still had mental capacity.

Now apart from the section 117 issue, which we weren't even aware of when mum was still well, there was no way that she would ever have been anywhere near IHT threshold as she would either be still at home or paying for care, so it was never something we discussed. The solicitor did say that a signed statement from her authorising gifts from normal income in this situation would cover it. But of course the vast majority of people are never going to foresee such a situation. If she is still with us in a couple of years it is something we will have to address and the advice was that it can be quite a complex and costly process.      

Albermarle

squirrelpie said:

We keep meaning to set up LPAs and I keep delaying. We need to set up so we each are attorney for the other, with back ups of other younger relatives for the case that the other spouse is not capable for whatever reason. Is there a clear explanation of how to set up that arrangement anywhere? Oh and to include a relative abroad in the financial backup arrangements?

In the DIY process already discussed, there is the facility to name a back up attorney. Not sure about a foreign resident though.
The poster calcotti already posted a link to all the guidance.