My son wants me to get power of attorney and I say it’s a waste of money – who’s right?
I am 84 years of age, healthy and fit for my age. I am independent, and do my own shopping, housework, gardening and so on.
I have £11,000 in savings and no life insurance. I have given my son a will drawn up by a solicitor. He inherits all my assets.
He wants to have a power of attorney document drawn up.
I have told him I think he is wasting money. Please advise.
Who’s right? My son wants me to get power of attorney and I say it’s a waste of money
Stephanie Mooney, private client associate at Kingsley Napley, replies: I am often asked whether a power of attorney, specifically, a lasting power of attorney, is really necessary.
Like you, many of us have straightforward estates with the usual assets – our home, a working bank account for utilities and a savings account.
There is an important distinction between a lasting power of attorney and a will. A will kicks in only on your death and provides for what should happen to your assets.
In your case, assuming your will is valid, it provides for everything to pass to your son.
In contrast, a lasting power of attorney covers who should look after your affairs and make decisions on your behalf if you lose mental capacity when you are still alive. The power ceases on death.
There are two types of LPA, one relating to property and finances and the other to health and care. As your question makes reference to your assets, I assume that your son is recommending a ‘financial decisions LPA’.
A financial decisions LPA allows your chosen attorney(s) to take care of matters on your behalf such as paying utility bills, liaising with banks and selling your home, if this proves necessary before your death.
I am not sure if you have a personal pension, but an LPA also allows your attorney(s) to give direction as to how your pension is managed.
If you lose mental capacity without an LPA, someone would need to apply to the Court of Protection to be appointed as a ‘deputy’, in order to manage your affairs.
This is a time consuming process. It currently costs £365 to make the application and deputies also have to pay an annual supervision fee.
The benefits of an LPA are:
– You retain control – You can choose for your son to be the person in charge of your affairs;
– Cost – It only costs £82 to register an LPA at the Office of the Public Guardian, plus legal fees (if applicable), and there is a reduced registration fee if your income before tax is less than £12,000 a year or you receive certain means tested benefits;
– Avoiding delay – Once registered, an LPA is valid and can be used as soon as it is required (including while you have mental capacity, with your consent);
– You can provide guidance – You can state preferences or instructions which your attorney ought to have regard to; for example, you might want to dictate the circumstances in which your home can be sold.
You do not need to instruct a lawyer to prepare an LPA. The form can be found online on the gov.uk website here.
You can complete it yourself, coordinate the signatures and send it to the OPG to be registered. I recommend you, and others in your position, take legal advice if:
– You have any concerns whatsoever about the person who you want to act as your attorney;
– You are weighing up whether you should have more than one attorney, and if so whether it is better to have them agree every decision, or let them act individually;
– Your property and financial assets are in fact more extensive than those you have mentioned.
If you prepare an LPA yourself, you will need to find a suitable ‘certificate provider’. This is someone who signs the LPA to confirm that you understand its purpose and that you are under no undue pressure to create it.
They need to be someone who has known you personally for at least two years or someone with the relevant expertise to make the assessment (for example, a doctor or a lawyer).
Legal fees for advising on and preparing LPAs should not be extortionate. To give you an idea, a central London law firm would usually charge somewhere in the region of £400-£500 plus VAT per LPA, plus the £82 registration fee.
A regional or local firm may be slightly cheaper, and some offer deals for couples who are sorting this out together. The registration fee applies regardless of law firm used.