'Ensure Your Legal Affairs are Well Organised'
urges Stephen Pett, from probate specialist solicitors, The Probate Department Ltd. Here he offers straightforward advice for anyone living with dementia....
Whether it is just a suspicion, or a diagnosis of dementia, leaving it too late to ensure your Legal Affairs are well organised can mean the wrong people end up in charge of your life.
If you don’t choose, then the Court of Protection will potentially have to decide. Because families don’t understand the process, or can’t afford it, very often Social Services will take charge (not your spouse and certainly not a common law spouse) or maybe a local solicitor. They would be known as your “Deputy.” Obviously, you will pay, but your family could end up with no ability to ensure you are treated as you would wish to be.
The same is true if when you die – that old out of date Will will be dug up and implemented, or maybe the Court of Protection will make a Statutory Will for you (at considerable expense.)
To be fair, everyone should be prepared once they are 18, things can go wrong at any time: tripping over, car accident, stroke etc etc. So all this applies to everyone, and there is never a better time than now.
Sometimes it is too late to arrange your own affairs, but most people will have “mental capacity” at the point of a dementia diagnosis. You are entitled to be presumed fit to make a Will and Lasting Powers of Attorney unless it is clear you do not have the ability to weigh up the consequences and make a reasoned decision. Often, that decision is just to let your family help out as needed and take over should things get really bad. But you should always be consulted, if it is at all possible.
Where things may get sticky is in “blended” families, second marriages and children who fall out with you or each other, or where you would like to leave responsibility or assets to carers – along with many other complications. Extra precautions may need to be taken here to avoid challenges to your planning later on. A Court dispute could mean everyone inheriting nothing but debt, as legal bills for disputes can be vast.
So the earlier things are set up, the better. Leaving it until too late is very expensive and things may go badly wrong.
Everyone needs a Will, and both Finance, and Health and Welfare, Lasting Powers of Attorney (the Scots have a different name for them.)
The Will appoints an executor to deal with things when you die, and tells them who inherits what (perhaps with a trust to protect a spouse or resident child). To make one, you must be aware of the nature and extent of what you own, and who you should consider leaving it too. You don’t have to leave it to the family, but it is important to take precautions if those who expect to inherit don’t – or everyone will inherit a Court case!
If there is no Will, or the Court decides your Will is invalid, then the Rules of Intestacy apply, and common law partners may have to claim through the Courts if they want to retain a home or inherit anything.
Lasting Powers of Attorney
Lasting Powers of Attorney are well thought through and DO NOT take away your control because the attorneys are required to consult you if at all possible, though not all attorneys seem to realise that!
Lasting Powers of Attorney come in two varieties:
Lasting Power of Attorney - Health and Welfare
This is really important, though lots of people don’t realise it. If Social Services decide you need residential care, the only person who can argue with them is YOU. And they may say that you have lost “mental capacity” and, generally, the Court of Protection will support them, cutting anyone who actually knows you out of the loop. Social Services may well talk to those who look after you, but they don’t have to agree with them or take any real notice, after all, they are the professionals. Only with a Health and Welfare Lasting Power of Attorney in place can the people who you decide to appoint fight for what they know you want. Rumour has it that the lack of these is often used as an excuse to avoid compensation claims when things go wrong.
There are also Advance Directives and Medical Directives which are specific to medical issues and carry nowhere near the power and flexibility of Lasting Powers of Attorney.
Lasting Power of Attorney - Property and Financial Affairs
For financial Matters – before 2007 there was the Enduring Power of Attorney. They were nice, inexpensive and “simple” documents which often don’t do the job they were expected to do. Most common reasons are that many people wanted them not to be used until they had “lost mental capacity” – which sounds good, but is rather all or nothing. Most people never lose mental capacity totally, so it can be hard to argue for their use (at least, with people who understand them!)
The other issue with Enduring Powers of Attorney is that the Attorneys (people who are to act for you) are often appointed “jointly” which means that the Enduring Power of Attorney (EPA) can only be used if they all agree on everything. If one of them dies, then that is the end of the EPA. If the attorneys are appointed “jointly and severally” then all or any of them can act.
Old EPAs can remain valid, but they cannot be changed. You can replace one with a new Lasting Power of Attorney Property and Financial Affairs. They offer a bit more scope for personal feelings and wishes to be recorded.
To summarise, you need an up to date Will, and probably two Lasting Powers of Attorney, and as longs as they are prepared early, just a diagnosis is no bar, but it is certainly worth asking the doctor to record in his notes that you appear to have “mental capacity” for Legal Planning purposes, just in case there is later a dispute.
For those who may be liable for Inheritance Tax, then now is the time to review your planning as it is very limited what can be done under Lasting Powers of Attorney.
Article by Stephen Pett, Client Services at The Probate Department Ltd. Solicitors. They advise people on these matters in England and Wales.
Specialist website on Lasting Powers of Attorney: www.LPAuk.com
Information on Rules of Intestacy where there is no valid Will: HMRC advice