Frettens resident Chartered Tax Advisor, Lee Young, is one of a few solicitors in Dorset to be dual qualified as a Solicitor and Chartered Tax Advisor. In this article, he provides a summary of the budget tax implications.
Unfortunately few of us remain physically and mentally capable forever. One of the greatest worries about growing older is that incapacity, mental or physical or perhaps both, becomes more likely. Of course, illness and accidents can occur at any age.
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Lasting powers of attorney were introduced into law in October 2007, replacing the previously very popular and simpler enduring powers of attorney. Enduring powers of attorney already in existence at this time remain perfectly valid.
The form of the lasting power of attorney
There are two types of lasting power of attorney – “property and affairs” and “personal welfare”. By setting up a lasting power of attorney you can therefore appoint one or more people of your choosing (the attorneys) to deal with your financial affairs, your personal welfare, or both. This can include:
- giving your attorneys access to your bank accounts
- paying your bills
- dealing with your medical care
- selling your property if required
- generally handling your affairs
You can have one attorney or more than one attorney if that suits your needs better. Either way you must be able to trust your chosen attorney or attorneys implicitly. It is entirely up to you how much "power" you give your attorney; you can limit the attorney’s authority to specific financial matters or give the attorney wide authority with guidance as to what you would like them to do.
Making a lasting power of attorney does not mean that you are giving up control of your own affairs; this only occurs when either you decide that you do not wish to deal with your affairs any more or you are no longer mentally capable of doing so.
Registration
A lasting power of attorney has to be registered with the Office of the Public Guardian before it can be used to look after your affairs. This can be a fairly lengthy process so our advice is for the attorney to register the power of attorney as soon as it is set up so that it is then ready for use whenever it is required.
Revocation
Lasting powers of attorney can be revoked at any time, even if they have been registered, provided that you (the donor of the power) still retain your mental faculties.
Security
Any type of power of attorney is a powerful document. It is our advice therefore that the original document should be kept in a safe place, for example with your solicitors, so that it can never be used until such time as you give permission or you lose mental capacity.
What if there is no power of attorney in place and you lose your capacity?
If you do not make a lasting power of attorney and you lose mental capacity someone will have to apply to the Court of Protection to enable a deputy to be appointed. A deputy has similar powers and duties to an attorney but there are considerable disadvantages:
- you do not get to choose your own deputy;
- it takes much longer to put a deputy in place to look after your affairs;
- the Court of Protection takes a much more active role in the management of your affairs, which can lead to frustrating delay; and
- the costs connected with the appointment of a deputy will most likely be more than double the cost of setting up a lasting power of attorney.
We've answered more frequently asked questions (FAQs) about lasting powers of attorney in a dedicated article. You can read it here.
