Is a Power of Attorney a Good Idea?
It certainly is according to recent reports from financial advisers and dementia charities.
Apparently the number of people with dementia in the United Kingdom is set to rise from 850,000 to 1,000,000 by 2025 and to 2,000,000 by 2051. If there is no lasting power of attorney and a person has lost mental capacity to handle his or her own affairs, a deputy is appointed to manage their financial affairs. This could be a friend or a solicitor but it is the Court of Protection who will make this decision and not the individual concerned. Deputies are subject to more supervision and scrutiny than an attorney who has been appointed under a lasting power of attorney. The deputy will need to complete an annual report to the Office of the Public Guardian and there may be visits from Court of Protection staff.
The advantage of appointing an attorney under an LPA means that you have someone that you trust to look after your financial and health needs should there come a time when you are no longer able to do so yourself. Clearly the person would need to have the right background information about you and your family so that appropriate decisions could be made. Financial advisers find it difficult enough to get people to make a will but it is even more difficult to get them to make a lasting power of attorney. This is because people will accept that they will die but will not necessarily accept that they will suffer from dementia or lose capacity in some other way.
Executors need to note that a lasting power of attorney ceases to have effect on death, so those executors who are also attorneys need to bear this in mind when administering the estate.