Monday, 6 October 2008
Planning for the Future! Do's & Don'ts
People generally feel comfortable planning most events - they can talk about moving house, building an extension, booking a holiday, but when it comes to protecting their assets and the mere mention of wills - they literally quake at the knees!
Latimer Hinks held a presentation this week on Protecting your Family - planning for the future! The talk opened my eyes.
Did you know, if you and your spouse/partner have a joint account and your spouse/partner becomes unable to handle their affairs your bank can freeze the account?
In effect you would not be able to draw money or pay bills. The bank’s view is that a joint account operates with the consent of both parties so if one party cannot give that consent then the account cannot be operated.
Imagine if you and your partner/spouse have only one joint account with all of your money in and that account was frozen because one or the other of you loses capacity leaving you with no access to money?
BUT if you have a Lasting Power of Attorney in place authorizing someone (perhaps your other half) to deal with your financial affairs in the event you are not able to do so this would solve the problem.
For all those who were clever enough to make an Enduring Power of Attorney before October 2007 these documents are still valid however, no new ones can now be made and the alternative is to make a Lasting Power of Attorney instead.
A Lasting Power of Attorney is a document you sign, which enables whoever you appoint as your Attorney to deal with your financial affairs in the event of incapacity in the future (usually mental incapacity but can equally apply to physical incapacity).
Many people think that their other half would be able to deal with things for them in this circumstance but unfortunately, without a Lasting Power of Attorney (or former Enduring Power of Attorney) in place this is simply not the case.
Without the legal formality of a Lasting Power of Attorney no one would be able to gain access to your finances or pay bills on your behalf leaving your finances in a mess and your family distressed at a time when they are already going through the trauma of seeing someone they love lose their capacity.
Do you really want to leave this to chance?
Here are some do’s and don’ts tips for making Personal Affairs Lasting Powers of Attorney .
DON’T - just rely on the thought that “it won’t happen to you” or “someone else can deal with it if you can’t”. Think of an LPA as an insurance policy that you hope you never need but make anyway “just in case”.
2. DO - have the LPA registered straight away. This ensures that if the document is needed urgently you do not have to wait for the whole registration process to be completed. Having the LPA registered also gives you piece of mind that the document does not contain any errors as it is checked and approved at registration and any errors can be put right at this stage.
3. DO – appoint a second Attorney either to act with the first or as a replacement especially if your first Attorney is the same age as you. This ensures that should the first die during your lifetime there is a “back-up” to take over.
4. DO – seek advice from a Solicitor if you are considering making an LPA as LPAs can be complicated and if you attempt to do it yourself you may not know whether or not it will work until it is too late (i.e. you have lost capacity and cannot make another one).
5. DO – make an LPA if there is/are any family member(s) you really would not trust or want to look after your financial affairs as they could end up being that person if you do not choose someone yourself whilst you are capable or doing so.
6. DO – make an LPA if you are aware of animosity or conflict within your family (such as your children not get on) as leaving the decision up to them could result in them not agreeing and an independent person or solicitor could end up being appointed instead.