Are you protected in the event of an unexpected loss of capacity?
These days people take out insurance for all sorts of eventualities. However, many are still vulnerable to their financial affairs being frozen in the event of an unexpected loss of mental capacity because they do not have a Lasting Power of Attorney (or an old style Enduring Power of Attorney) in place.
We regularly get involved when someone unexpectedly loses mental capacity whether through an accident or sudden illness and know that this can cause enormous practical issues at an already difficult time. It may even result in financial loss (for example, where investment decisions cannot be taken without a court order leaving an investment portfolio in limbo for an extended period of time). An order from the Court of Protection appointing a ‘deputy’ is usually needed when someone loses mental capacity if there is no Lasting Power of Attorney (or ‘old style’ Enduring Power of Attorney) in place. The appointment of a deputy can take several months and cost over £1,000 with additional costs and form filling every year afterwards.
Many people put off making a Lasting Power of Attorney because they don’t realize that even a spouse or partner cannot automatically access the finances of someone who has lost mental capacity and that even joint accounts may be frozen in that case. Moreover, those in business are unlikely to have considered the extent to which the effective running of the business would be hampered in the event of the unexpected loss of capacity of one of the business owners. Of course, everyone hopes it is not something which will be relevant for them or at least not for a long time yet.
A Lasting Power of Attorney is something all adults should put in place when they are fit and well as an effective insurance policy against these practical and financial difficulties and delays. We help clients facing such difficulties every week. This means we can guide clients through the process and the choices when putting in place an appropriate Lasting Power of Attorney to provide real peace mind for them, their families (and in the case of business owners for those in business with them)!
Further Information & Legal Advice
For more detailed advice contact a member of our Private Client Team.
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