What can happen if you don't have a Lasting Power of Attorney?

Did you know? Most people over 40 haven’t set up a Power of Attorney yet.

According to recent research shared by Which?, only 17% of people aged 40 and above have made arrangements so that someone they trust can manage their health or financial affairs if they become unable to do so.

Yet if something unexpected happens and there’s no Power of Attorney in place, your family may not be able to make the decisions that you would choose. These can be important decisions such as a wish to remain living at home, and not moving to a care home. It could include financial decisions to provide for your spouse and children

Taking action now means you stay in control. We can guide you through setting up a Lasting Power of Attorney quickly, clearly, and with confidence. We are Accredited Lifetime Lawyers and Dementia Friends.

Let us guide you through a quick example of a fictional Husband and Wife in their 60's, Mr and Mrs Davies.

• They are both retired and the bulk of the income and assets are in Mr Davies' name.

• He is the sole account holder on the savings accounts.

• Mr Davies has a private pension which provides a monthly income to cover the household bills and expenses.

• Mrs Davies has a standard state pension and a small monthly income.

• Mr Davies is the Account Holder for the Broadband, Gas, Electric, Water and Council Tax accounts.

• Their home is in Mr Davies' Sole Name and both of them have lived at the property for 40 years.

• The couple do not have joint accounts.

• Neither of them have made a Will or a Power of Attorney.

Without a Power of Attorney

Unfortunately, none of us know what could be around the corner and things can happen suddenly forcing us to look at our financial circumstances to try to plan ahead.

• Mr Davies sadly starts to have some memory loss and is unable to deal with the finances.

  
  

• As he cannot give instructions to the Bank, the Bank make a decision to freeze his bank accounts for security purposes so that nobody can access the Accounts.

  
  

• Mrs Davies cannot access the money held in the Savings Accounts, as these are in her husband's sole name.

  
  

• Mrs Davies cannot access her husband's pension, as this is in his name, and the Pension Company will not accept instructions from his wife. She needs this money to supplement her small state pension.

  
  

• Mrs Davies cannot pay the household bills, as she does not have access to any money. She starts to fall into arrears.

  
  

• She has a problem as the house is in her husband's sole name. She cannot sell the house or move to another property to limit her expenses. Only her husband can sell the house.

  
  

• Social Services become involved and ask about a Power of Attorney. The couple haven't made a Power of Attorney.

  
  

• It's all very frustrating at an already difficult time and is adding to the stress for Mrs Davies and her family. What action can be taken at this stage to help Mrs Davies?

  
  

What options are available?

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• Can Mr Davies now make a Power of Attorney which will unfreeze the assets?

  
  

  • No, this is no longer an option as Mr Davies no longer has the required level of capacity to make a Power of Attorney as he cannot understand the terms and remember the information.

    
    

• Can Mr Davies make a Will?

  
  

  • No. Mr Davies cannot make a Will without having the required level of capacity and this only transfers assets to Mrs Davies AFTER HIS LIFETIME. It does not help Mrs Davies with her current situation.

    
    

• The main option is for Mrs Davies to apply to the Court of Protection for a Deputy Order for Mr Davies. The Court can then consider appointing Mrs Davies as the Deputy for her husband and she can then access the finances, once she has the final order. However, this can take a year to be granted, or longer and costs can amount to a few thousand pounds. There is little that can be done in the interim period before the Order is issued.

  
  

• Mrs Davies is left without any access to the savings accounts, the pension and the household expenses. and none of the companies will speak with Mrs Davies in the absence of Mr Davies. He remains the account holder, deposit the fact that he does not have capacity.

  
  

• If Mr Davies had made a Power of Attorney at an early stage, appointing Mrs Davies as his attorney, this would have been an instant solution and have avoided the family a lot of stress and worry.

We would encourage you to look at your financial situation and take a few small steps to plan for the future. this could avoid any stress or worry at a later stage and provide some peace of mind for you and your family. Its important to act quickly and make the Power of Attorney at an early stage so that it's already in place for unforeseen circumstances in the future and has already been registered with the Court.

Please contact our Expert Lawyer Charlene Ash on 02921 406152 or email enquiries@calonlaw.com. We can answer any questions that you may have and provide some guidance on the next steps.