Posted in Private Wealth
The sad news in recent weeks that Hollywood film legend Omar Sharif is suffering from Alzheimer’s disease is yet another example of how dementia in all its forms is on the increase.
A charismatic superstar most famous for his roles in Lawrence of Arabia and Dr Zhivago, Omar Sharif was also a world class bridge player demonstrating that he was quite clearly, a man with a sharp mind. Despite this though, he has succumbed to a disease, which is one of the flip sides of us all living longer.
The Alzheimer’s Society estimate that over a million people in Britain will have the disease in the next decade and this is tough on loved ones supporting them.
Many independent people can no longer look after their financial affairs due to this condition, and what the public need to know about is how they can help themselves and their loved ones in such situations. Many people, probably the vast majority are unaware of the Mental Capacity Act 2005, which allows people to manage money on behalf of loved ones under what is known as lasting power of attorney agreements.
A Lasting Power of Attorney is a legal document which lets someone else makes decisions where a person has lost mental capacity, but what has to be clear is they can only be set up when the person is still able to make rational decisions for themselves.
This gives you more control over what happens to you if, for example, you have an accident or an illness and can’t make decisions at the time they need to be made (you ‘lack mental capacity’).
You must be 18 or over and have mental capacity – the ability to make your own decisions – when you make your LPA.
There are 2 types of LPA:
1) Health and welfare lasting power of attorney
Use this LPA to give an attorney the power to make decisions about things like:
- your daily routine, e.g. washing, dressing, eating
- medical care
- moving into a care home
- life-sustaining treatment
It can only be used when you’re unable to make your own decisions.
2) Property and financial affairs lasting power of attorney
Use this LPA to give an attorney the power to make decisions about money and property for you, for example:
- managing a bank or building society account
- paying bills
- collecting benefits or a pension
- selling your home
It can be used as soon as it’s registered, with your permission.
You can choose to make one type or both. All of us can regale stories of people trying to talk to banks or utility companies on behalf of someone but getting frustrated with progress due to confidentiality.
So imagine how challenging this is if the person is not able to make their own decisions?
As already stated, when the mental capacity to make the decision has been lost, it is too late, and an application would instead need to be made to the Court of Protection, which is lengthy and expensive process.
We wish to make it clear that once a lasting power of attorney is in place it does not mean the person can no longer make decisions on their own affairs. They can carry on as before, but the appointed attorney is there just in case. As you can see this document makes good sense but it means families will have to face up to what may lie ahead and make provisions.
However, as our population grows older the need for us to have safeguards has never been greater.
If you considering making another Will or look to carry out inheritance tax planning it would be the ideal time to consider and make your Lasting Power of Attorney.
If you want more information regarding this issue, simply give us a call on 020 8951 6959 and ask to speak to one of our private client specialists solicitors.