Lasting Powers of Attorney - do you need one?
- Written by Nick Fluck
We see a lot of clients who have been advised (sometimes elsewhere) to make Lasting Powers of Attorney ("LPA").
Generally speaking most clients do not clearly understand why this is a sensible thing to do so this article sets out to look at the pros and cons.
Firstly, what is an LPA?
This is the modern form of an Enduring Power of Attorney - in those the power "endured" regardless of the mental or physical state of the person who set it up (usually called the "donor" (Latin for "giver")) as a Power of Attorney is usually "given" by the donor to their trusted stand-in or attorney.
In just the same way as Enduring Powers of Attorney continued to be applicable even after the donor lost capacity the "Lasting" in lasting powers of attorney means that the powers granted by the donor to the attorney "last" in the same circumstances. Just to make this a little clearer - there are also "ordinary" powers of attorney - these neither endure nor last - if the donor loses capacity the power of attorney can no longer be used as the power to use it is an extension to the powers of the original donor - so, if they can no longer act, neither can their attorney.
They come in two flavours.
LPA for property and financial affairs - these allow the attorney to make decisions and deal with the property and finances of the donor.
LPA for health and welfare - these allow the attorney to make decisions about health care (including agreeing to or refusing life sustaining treatment, if the donor wishes them to have these powers) and welfare generally.
Why should I / shouldn't I make one?
The vast majority of people will be fortunate and will retain mental and physical capacity to make their own decisions and sign their own documents for their whole life. However each step forward in medical care makes it more likely that an increasing number of us will lose the capacity to manage our own affairs - and for those folk having a trusted appointed attorney may be vital. For many purposes the LPA may take effect as though it were a Will but allowing your attorney to deal with your affairs during your lifetime, rather than allowing your executors to deal with them after your death. If you have any concerns about what would happen if you were to lose capacity then you should certainly consider making an LPA.
The real difficulty is that the LPA is not something which can be set up in a few minutes. The forms do not take long to complete but registering the power with the Office of the Public Guardian (a necessary first step before the power is valid) currently takes 8-10 weeks - not conducive to urgent decision-making - and this is probably the most important reason for making an LPA when you don't have any urgent need to.
Crucial things to understand.
An LPA does not usually give attorneys any powers to benefit themselves - the entire regime is set up on the basis that decisions made by an attorney must be made in the best interests of the donor - this sometimes leads to some serious difficulties - for example if one of a married couple becomes unwell and cannot any longer manage their own affairs it may seem logical that their half share in the matrimonial home might be passed to their children - after all if they are in a home they no longer need it and it would be better for their financial interest in the property not to still be in their hands if questions about their ability to pay fees may arise - but would the actions of the attorneys deciding to transfer the patient's property share be legal?
Regardless of LPA - most healthcare decisions are taken on the basis of perceived medical need - doctors admitting someone to hospital in a distressed or confused state will tend to treat the symptoms first and may have no idea whether there is an LPA giving a third party the right to be involved in health care decisions.
So who should I appoint?
If you have a trusted next generation appointing someone who is younger and fitter but who has your interests at heart is usually a good bet. There are rapacious children who would conspire to do their parent down - but they are fortunately very rare.
How should I appoint my attorney(s)?
I think the commonest mistake most people make when constructing their own LPA is to appoint more than one attorney but to then specify that they must act "Jointly" - if you have three attorneys and all of them are appointed jointly then if any one of them dies, is unavailable, or declines to act, their individual action (or inaction) means that no other attorney can carry out your wishes as you said they could only do this if they acted "jointly". It is far better to opt for "jointly and severally" which basically means your attorneys can act alone or together - this means any of your attorneys can make decisions for you even if the others are away, unwell or perhaps even dead.
Many folk get very exercised about whether or not they should impose restrictions or conditions upon what their attorney(s) can do. For example some people regard their home as so important that their attorneys should not be allowed to consider selling it unless they are unanimous - or unless a doctor certifies that they have lost capacity. My own view is that rather than imposing restrictions on what the attorneys can do it is usually better to choose an attorney whose judgement you trust and who you know will look after you as a priority.
We are always happy to help clients consider Lasting Powers of Attorney - please contact Nick Fluck or James Buxton via our contacts pages for more details.
Elizabeth Leggett LLB (Hons) - Expert Private Client Solicitor
- Written by Nick Fluck
We are delighted to welcome a new member of staff. Elizabeth Leggett is joining us to add valuable private client expertise and will be pleased to advise you in relation to Wills, Trusts, Powers of Attorney and the Administration of Estates.
Elizabeth has a wealth of experience and will be a real asset to our clients.
Elizabeth was born in Lincolnshire and is looking forward to getting back to her roots.
Saving inheritance tax, making sure you benefit your nearest and dearest, avoiding family disputes, providing for yours, or another's care in old age or infirmity are all matters best discussed with an expert. A little timely and expert advice can easily make tens of thousands of pounds worth of difference.
If you need advice or wish to make a new Will, Lasting Power of Attorney or deal with someone's affairs after their demise, then please do get in touch with Elizabeth.
Coronavirus- government advice if you are (trying to) move house
- Written by Nick Fluck
In the current coronavirus emergency the government is taking extraordinary steps to restrict movement (and therefore to reduce the rate at which the virus spreads in the wild). If you are moving house and have already exchanged contracts this gives you a potentially serious problem. Under the terms of the contract you will have made legally binding pledges to move out / in (if you are selling or buying respectively) and both if you are both selling and buying. Your solicitor may also have requested your new mortgage funds, if you are buying with a mortgage, and a redemption statement to be able to pay off any current mortgage on your sale. All of these figures are usually time critical. The government has now advised that if the property you are planning to move to is not already vacant then you should make every effort to agree, within the chain of transactions that may be affected, that you will all agree to a postponement.
From a legal point of view this could be a nightmare but there is very strong governmental pressure upon all the relevant parties who are involved to facilitate this.
It may be as simple as agreeing to postpone a previously agreed completion date for a certain length of time or you may run the risk that the contractual provisions, which oblige you to vacate the house you are selling, are enforced against you by law (if an open Court can be found!).
If your removal company cannot meet the date they promised, they should agree to rebook without charging you an additional fee - but the terms you accepted when you signed up, may compel you to pay them, if the reason they cannot fulfil your insturctions is due to force majeure.
Most mortgage lenders have agreed that the validity period of any mortgage they have offered to you will be extended for three months if you have exchanged contracts but not been able to complete.
Last minute searches to check the state of a title at the Land Registry cam be quickly and simply re-done by your solicitor to make sure that your purchase is protected.
The underlying position will be a sudden sharp cooling in the housing market and this may affect values of properties in the longer term. If you find yourself in a difficult position in relation to your house sale or purchase as a result of the lockdown, take advice from your solicitor. Most firms are running electronically with their staff now working from home and will be pleased to help you if they can.
The aim, as always, is certainty, to make sure everyone know what is going to happen.
If you can't move, be kind, be patient and stay safe - this too shall pass.
The murky world of Estate Agents and their "in-house" conveyancers
- Written by Nick Fluck
So you've taken the plunge and decided to move. You've looked at the local area to find out which agents are selling well and finally met up with someone in a shiny suit to sign up for a sale of your property. At some point in this process you will be offered an incentive to use the agent's in-house conveyancers who are always "much better for you, quicker and all under one roof so you will get a far better experience from your sale" - you may even be told that if you want to use a previous trusted Solicitor or similar that an additional fee will have to be levied to cover the enhanced costs of dealing with an outsider.
The vast majority of agents who tell you this are simply lying.
Firstly why should you have to pay the agent more to use a previous trusted solicitor - what additional costs do they incur? Secondly, they almost certainly do not have "their own" in-house conveyancers - nor will the process be quicker or cheaper. What they have is a cosy and usually undisclosed arrangement with a volume conveyancer - often many miles away - where the agent gets paid for introducing your business to the conveyancers. In some cases the "in-house" arrangement uses sophisticated technology to brand a "white label" service with the agent's name - the same bulk conveyancer will be working for several different agencies and all of them are selling their services as "their" in-house conveyancing team.
Some volume conveyancers will do a great job for you - but their whole model is geared to dealing with a large volume of similar business efficiently (after all a significant proportion of their fixed fee is really paid to the selling agent for sourcing the business, so there isn't much left to fund quality staff or bespoke dealing). If your transaction is entirely uncomplicated it may be handled perfectly adequately by a largely automated process, but as soon as something abnormal crops up, watch out for additional charges, which you will have been warned about in the small print of the standard paperwork you will receive from a bulk conveyancer. Volume conveyancers will always make sure they have complied with any necessary regulatory issues, so if things go wrong you won't have a leg to stand on.
In a recent transaction we noted there was a need to deal with a common issue and a "rider" had to be added to the contract. We put this forward as a half-dozen lines of text - with no additional charge. The volume conveyancer acting for the sellers demanded an aditional £100 plus VAT from their clients as a fixed fee to deal with this.
If you are getting a hard-sell from your agents recommending their in-house lawyers - ask them where they are based, will you be able to go and sit down with anyone if any of the paperwork gets tricky and, crucially, what do they get for recommending them.
For traditional highly-skilled and genuine personal service for your domestic conveyancing from our fully-qualified solicitors please contact Robin Dickinson; Jo O'Hara; James Buxton or Nick Fluck via our contacts links.
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