Setting Up Your Lasting Power of Attorney Correctly For Care Planning
Practical Issues
When choosing your attorneys for Lasting Power of Attorney (LPA), people will often say, “oh, it’s just a name and address on a form, what could possibly go wrong?” From experience unfortunately, for those LPA DIYers, quite a lot does go wrong and its usually up to very expensive solicitors to sort it all out! Do you want to create legal documents that will impact on the most important stage of your life without taking advice? If you can navigate the paperwork and OPG correctly (which is an onerous task in itself) LPAs can seem deceptively simple.
You must remember that you are creating legal arrangements where attorneys can take all your money, sell your property, make decisions around your care, decide whether to move into a care home or not or have that operation. Do you want to give away control of these decisions without taking financial and legal advice upfront and on-going?
True, the choice of attorney is sometimes obvious. Common choices are the spouse and the children. But do they have the time, skill and ability to carry out the role? There are some lovely people out there that you might love dearly – but some people can find managing money tricky, some are disorganised and many find planning and administration really challenging. Some don’t have that ‘bedside manner’ to help you with your day-to-day health and well-being and make care decisions.
Do the attorneys get on?
Many families do; many families do not! This is especially true when life impacting decisions are being made for significant amounts of money (the average residential care cost is upwards of £300,000) in particular, but also regarding health and care decisions. In our experience it is more common for families not to agree!
Are the attorneys abroad?
Although its technically possible for an attorney to be abroad, how practical is this? From a financial point of view, some banks and other wealth institutions say they will only deal with an LPA if the attorney has a UK telephone number or they actually come into the branch. Paying for care, either bringing in care to the home or moving into a care home will involve significant financial decisions about your loved ones existing financial arrangements. From a health and welfare point of view, the attorney needs to be accessible, able to answer the phone in the middle of the night, attend to day-to-day living and welfare. Not being local may not be practical.
How are you going to set up your LPA?
On a joint or joint and several basis? Or joint for some decisions and joint and several for others? Usually joint and several is the way forward as the requirement for every attorney to sign and deal with every single care decision or financial payment can become unwieldy. Also, with making decisions jointly only, if something was to happen to one attorney then you are left with a useless, unenforceable document.
Perhaps huge decisions concerning sale of the property to pay for care or choice of care home setting might be done on a joint basis? Are the two attorneys also the co-owners of the property, in which case loss of capacity may mean selling the property now becomes problematic. Regardless, these things need to be discussed. That simple LPA application is not seeming so simple.
When do you want your attorney to act?
Regardless, we would always advise you get your LPAs registered as soon as possible so that they are ready to use when needed. Given the registration delays at the OPG and possible application inaccuracies during that process which can lead to further delays, it’s important to get the registration done and dusted as soon as possible. People usually start thinking of care when the family is in crisis and the loved one is in urgent need of care – ideally the LPA will have been set up, registered and the family fully on board with its contents, preferences and side letters of wishes so that when the time comes to arrange and pay for care, we can act swiftly.
The registered and active LPA can also be useful on a temporary basis if you are physically unable to deal with things in the interim – you might be away on a world cruise, you might be in hospital having an operation or recovering from a fall. You might simply not be able to get out of the house for a while due to a harsh winter.
That being said, registration does not mean the attorneys can act immediately. Always have a side letter of wishes available to make clear your preferences, wishes and what you want to happen in certain circumstances, particularly around care planning and funding. This is a core part of our annual advice process – don’t do a cheap LPA, leave in a bedside drawer and forget about it – this defeats the purpose of taking an LPA out in the first place, namely to give you protection and control and a life in later life that is according to your wishes.
Our advice is generally not to appoint replacements, it’s usually preferable to appoint normal attorneys and either have a separate informal agreement as to who will act and when or use a Letter of Wishes to confirm details of which attorney is to act and when. The issue with replacements is that it doesn’t help with temporary situations like if children are needed to step in on a step in on a temporary basis. Also, if a replacement attorney is needed, you have to wait for the OPG to activate the replacement, a process that can take some time, especially if the OPG require additional information and paperwork. With care planning and funding which is often required if not emergency situations, then usually time-pressured situations, its important there are no delays.
The ideal advice process is to use a combined legal and financial planner like us with complete understanding of the financial situation, the care setting and care funding options, as well as the family dynamics. Again, a Letter of Wishes is advisable from outset to accompany these legal documents to ensure the donor’s underlying wishes for care and care-funding are catered for.
As legal advisers we will always remember who the client is and ensure that everything is done in their best interests. This is regardless of what the attorney says. For instance, if the attorney is considering selling property to pay for care costs, we will always check with the donor to make sure they are ok with this. If we have concerns, we will report back to the OPG on the donor’s behalf.
Who Is In Control?
Nowadays, not just LPAs, but everything can be done online. Attorneys are notified that the LPA is registered and will be sent a digital key. They can effectively start using an LPA immediately. With the move to everything being paperless and online applications, it could be argued that the LPA is easier, but at what cost? Where are the safeguarding controls going to be? After notifications will attorneys be thinking they should do something when they shouldn’t be? Just because an attorney is registered it doesn’t mean they should just take over or start making decisions.
For sophisticated clients with significant assets and property and important choices to be made around care settings and care funding options available to them, it’s not appropriate to simply choose the cheapest LPA application option – there is too much at stake and for a very modest investment in advice, it can give you peace of mind.
Using a legal professional adds a layer of protection for both donor and attorney. It is best practice to send certified paper copies of the Health & Welfare LPA to the attorneys so the H&W LPA can be used in an emergency. However, for Finance & Property LPA these can be kept safeguarded at the office or a secure storage facility, then if attorney wants to use them there is another layer of safeguarding to go through. Remember the donor should still be the decision-maker at all costs, every effort must be made to keep them in control, especially whilst they still have capacity. We never forget who the client is. For the attorney also, we will support them, having a strong back-history of file notes, reviews and hopefully a Letter of Wishes, the attorney can be guided and supported in carrying out their wishes in the donor’s best interests.
In addition, as part of the application process, we are the so-called Certificate Provider. The person or professional that signs off the LPA application as a legal document that has satisfied legal requirements. A bit like the role of executor, it can be seen as an honour by some friends and family to be asked to the Certificate Provider, until the time comes when they are called on to handle OPG complaints and other legal consequences as a result of various problems and issues that can arise. The Certificate Provider effectively takes on legal responsibility for the LPA.
LPA Application Errors
During the registration process it is possible to make minor amendments, but once registered the LPA is a legal deed and cannot be amended. A word of warning, when handling applications, the OPG will only ensure an LPA application is registrable (looking out for obvious errors) as opposed to whether the LPA itself is legally useable, correct and / or properly instructs as per the donor’s wishes. Therefore, problems can arise down the line after registration, problems that can be fixed only be expensive solicitors often via Court of Protection applications. We strongly recommend taking LPA advice and getting your LPA application right first time.
When we organise LPAs, part of our process involves a rigorous checking service to ensure that any LPA applications are sent to the OPG only once the application is ready, complete and correct. It is so, so easy to make mistakes on the applications. Wrong boxes signed, dates of birth’s mixed up. The most common one is all the dates and signatures have to be in a prescribed order. Worse, the same errors can often be dealt with differently by different OPG case-handlers. Honestly, just let us take the pain away. Any rejected application can put the whole process back months. At a time when it might be needed.
Health & Welfare LPAs
There are usually no practical issues without a Health & Welfare LPA when a spouse is dealing with the carer or doctors. The issues generally start when dealing with children, in particular children of blended families. This is especially so when said children can’t agree on the best course of action for the loved-one’s care.
It must be remembered that the H&W LPA can only be used once the donor is incapable of making a decision. Therefore, it is critical that at this time, the H&W LPA has been set up, registered and correctly outlines the specific requests and preferences of the donor. Possibly supplemented with an up-to-date Letter of Wishes. Typical preferences we see are a wish to stay at home at all costs, or move to certain, pre-chosen care homes.
Letter of Wishes
This is a separate and signed and dated document reviewed and updated at your periodic review. It needs to be kept safely and securely alongside (but not attached to) your legal documents and financial planning paperwork. In short, ensure it needs to be readily available and can be found!
When planning for or paying for care it is important to know that the side Letter of Wishes is direct, professional and up to date. Any Letter of Wishes should explain your care objectives, preferences and patterns. It should indicate any triggers for such care planning, like if the property were to be sold meaning cash would be available, how should that cash be best utilised.
Here our financial planning review reports will also help guide both you, the attorney in establishing the goals and motives for the person who is preparing or is paying for care.
Harold Stephens
Harold Stephens is a local, later life financial and legal planning specialist with a special interest in long-term care provision and tax efficient funding options. If you, or your loved one, are at the point of care need and are currently making important care funding decision then get in touch now for an initial chat with one of our specialist advisers by calling 0117 3636 212 or emailing office@haroldstephens.co.uk.
We will also be putting on some in person events throughout October and November in the local area covering the topic of care funding decisions and related later life financial and legal planning. Event details are updated regularly here: https://www.haroldstephens.co.uk/events/
