Watching our parents, grandparents and elderly relatives become frail, incapacitated or infirm is something we all encounter at some point in our life. It is often difficult to come to terms with the physical and mental decline that is increasingly present in our ageing population. I have seen my own grandparents become less able to do everyday things for themselves – whether it is cooking their meals or remembering to pay their heating bills.
Mental incapacity unfortunately remains a taboo subject in today’s society. We have all encountered that stubborn relative who insists on doing things for themselves when in reality they are not able to cope with their finances or wellbeing independently.
When the time comes that an elderly relative requires assistance with managing their money I am often contacted by family members who are unsure what they can do to help, how they can go about providing assistance or indeed where to start.
It is important to think about putting measures in place to facilitate financial support for an elderly relative in advance of when that support is actually needed. I encourage my clients to think about who they might want to appoint to help them with their financial affairs when they are no longer able to do so. We discuss the benefits of executing a Lasting Power of Attorney (LPA) as a potential solution and as part of their wider financial planning.
An LPA is a formal document which grants the Attorney authority to deal with the Donor’s property and affairs on their behalf when they are no longer able to do so. An LPA must be registered with the Office of Public Guardian which oversees all Lasting Powers executed in the UK. It is important that the LPA is drafted accurately and in accordance with UK law to ensure that it can be used after registration.
However, all too often I am contacted by relatives of family members who already lack capacity – they might have dementia or some other disease of the mind – and they made no provision by way of an LPA to articulate their wishes about their property and affairs to formally set out how they would wish to see their affairs managed and by whom. Once a person is deemed to lack capacity he can no longer execute an LPA.
In the absence of an LPA it is almost impossible for family members to assist with the payment of bills, medical expenses and other living costs. This means that an elderly relative might have their heating or water cut off or may not be able to withdraw funds from their bank for food. They may have failed to keep up repayments on their home or be unable to pay for their carers.
I meet a lot of families who find themselves in desperate situations, wanting to help their relatives, but not being able to do so as they have no legal authority to provide this assistance. Banks and other institutions will simply not release funds to an elderly client’s daughter or son by mere virtue of their familial relationship. There must be a legal basis for involving another person in the financial matters of someone who lacks capacity.
Clients who find themselves in such circumstances will need to make an application to the Court of Protection for a Property and Affairs Deputy to be appointed. This is a complex process. A Deputy is like an Attorney, but he or she will be appointed by the Court to manage someone else’s finances. A Deputy can be lay or professional but both will have rigorous duties to perform in their capacity as Deputy and will have to account to the Court of Protection regularly. A Deputy will also have to keep a written record of every financial decision made, why it was made and retain evidence to show that it was in the best interests of the person they are acting for.
Most of my clients prefer to have a professional Deputy appointed. This removes a lot of the administrative stress and ensures that all matters are dealt with properly and in a manner that is compliant with the Court rules. Once appointed as Deputy we are able to contact all relevant banking intuitions, utilities providers, care givers and ensure that all bills are paid, debts discharged and that all financial matters are in order. We are able to secure all assets and manage those in a vulnerable client’s best interests whilst working alongside family members to support the needs of the individual.