“There are significant detrimental consequences of not having Power of Attorney protection in place”
POWER of ATTORNEY
A lasting power of attorney (LPA) is a legal document that lets you (the ‘donor’) appoint one or more people (known as ‘attorneys’) to help you make decisions or to make decisions on your behalf.
This gives you more control over what happens to you if you have an accident or illness and can’t make your own decisions (you ‘lack mental capacity’). You must be 18 or over and have mental capacity when you make your LPA. Your attorney(s) must be 18 or over. You can choose one or more people to be your attorney. Attorneys are often your spouse and another relative (ie. children) or friends whom you trust.
There are 2 types of LPA:
Every adult should have a lasting power of attorney in place as there are significant detrimental consequences of not doing.
If you are incapacitated (lose your mental capacity) for any reason your banks/financial services companies will be notified and they will freeze your accounts. This will obviously cause significant problems in addition to the stresses and strains for you and your family on top of the medical that you are already experiencing. To resolve the issue in most countries someone on your behalf (ie. your spouse, a family member/close friend) will need to apply to the courts to unfreeze your accounts.
In the United Kingdom the Court of Protection is responsible and detailed below are the typical financial consequences of not having Power of Attorneys.
£3'000: The costs to apply to the Court of Protection to unfreeze your accounts.
£1'500: The ongoing annual management fee to the Court of Protection (£1'200 from yr/2)
£ 500: The ongoing annual accounts reporting fees to the Court of Protection & HMRC
6 months: The average time it takes for an application to be granted.
*Alarmingly, there are currently approx 150'000 people in the UK alone who's partners assets are managed via authority from the Court of Protection due to not having lasting power of attorney.
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