By Matthew Peto.
Why it’s sensible to consider a Lasting Power of Attorney for ageing parents.
It’s hard when your ageing parents need more and more of your help. Coping with the emotional and practical stresses of caring for elderly parents can be very challenging, especially when vital decisions about healthcare and finances need to be made.
Faced with these difficulties, many families are now opting to register a Lasting Power of Attorney (LPA), a document which enables elderly parents to authorise someone to support them in making everyday life decisions.
It was recently revealed that more than 134,000 LPAs were registered in England and Wales in the final three months of 2015 (Ministry of Justice Statistics Bulletin). This is up 40% on the same quarter for 2014 and not far off the 150,000 that were registered in a whole year just five years ago. This is partly due to increased awareness and a simplification of the LPA documentation, but it is fundamentally the convenience and peace of mind that LPAs give to families and loved ones.
What is an LPA?
An LPA is a powerful document. By putting in place an LPA, one or more individuals (known as the “attorneys”) are able to make decisions on behalf of another person, in some cases even whilst they still have capacity. They can therefore offer a practical way of removing the burden of decision-making from ageing parents.
There are two types of LPA – one deals with property and finances (Property & Financial Affairs LPA) and the other with personal welfare (Health & Welfare LPA). If you are chosen as an attorney by your parents, a Property & Financial Affairs LPA would allow you to deal with their bank accounts and investments, pay their bills and if necessary sell their house. A Health & Welfare LPA would allow you to make decisions around your parents’ medical treatment (including life sustaining treatment), where they live and day-to-day matters such as diet, dress and daily routine.
When can an LPA be used?
An LPA has to be registered with the Office of the Public Guardian (“OPG”) before it can be used. The OPG is a government body that helps to protect people who lack capacity within the framework of the Mental Capacity Act 2005. One of its key functions is registering LPAs so that people can choose who they want to make decisions for them.
In the case of a Health & Welfare LPA, even once it is registered, it can only be used when the individual loses capacity. A Property & Financial Affairs LPA, on the other hand, can be used (with permission) as soon as it is registered if these are the wishes of the person registering it. This can be extremely useful if your parents have problems with mobility or are out of the country for an extended period of time and need someone to attend the bank to deal with their accounts, for example.
At what point should your parents consider registering an LPA?
Unsurprisingly, the most common age group applying to register an LPA is 81-90 years, with other significant age groups being 61-70 and 71-80. However, while it is never too early to broach the subject with your parents, it can be too late.
Your parents can only make an LPA whilst they still have mental capacity, which unfortunately can deteriorate rapidly. The numbers affected by dementia are set to double over the next 25 years, whilst early-onset dementia (that is, dementia before the age of 65) is becoming more prevalent. Sudden accidents like a car crash or sporting injury can be even more problematic because they are unexpected and the loss of capacity often immediate.
Indeed, there was a campaign last year (Planning for the future: Choice not Chance) which sought to encourage younger people in their 20s and 30s to talk to their parents about LPAs despite it being a very sensitive subject. Registering can relieve you of the stress of being forced to make important decisions in a vacuum without ever having found out what your parents’ wishes are.
It can take several months to register an LPA so it is better to deal with the registration shortly after your parents have made an LPA so that it is available for use at short notice. The registration process will also pick up any errors (which can cause LPAs to be rejected) that are only able to be fixed whilst the person registering still has capacity. There is currently a court fee of £110 for each LPA that is submitted for registration.
LPAs and the family
It can be particularly difficult speaking to your parents about a time when your roles will be reversed and you will be the ones looking after them, yet it is almost always best to have a conversation sooner rather than later. This will make the whole process easier for them and for you.
Putting off a conversation with your parents carries the risk that they may lose capacity and then cannot implement an LPA. This can have adverse consequences, particularly for property and finances. For example, what if you need to pay for your parents’ care but have no authority to access their bank accounts? A Deputyship application to the Court of Protection would be required, but your parents would have no control over who makes decisions on their behalf as the person entitled to make decisions will be appointed by the Court. The Deputyship process can be expensive, extremely stressful and there are onerous reporting obligations to the Court each year. There really is no time like the present.
A conversation as a family is important to make sure that everyone involved is happy with the structure you are going to adopt for your parents’ LPAs. It is worth mentioning that you shouldn’t feel obliged to take on the responsibility of being an attorney; one of your siblings or another close family member may be better placed to take on this role instead.
In any event, LPAs should be regarded in just the same way as Wills – kept under review and, if necessary, changed over time. Circumstances change and so your parents should be encouraged to replace their LPAs if their existing LPAs are no longer fit for purpose.
Are there any alternatives to an LPA?
The main purpose of an LPA is to allow someone to make decisions on your behalf once you have lost capacity. Very few other arrangements exist which can achieve this.
It is of course possible to set up a joint bank account with one or more people and if your parents are married they are likely to already have this arrangement. If one of the account holders loses capacity, the other(s) can still access and manage the account and apply any money on that person’s behalf. This might be thought to have the same effect as a Property & Financial Affairs LPA. However, whilst a joint bank account can be helpful in the short term, there is a risk that the bank might freeze the account if it discovers that one of the account holders has lost capacity.
An Advance Decision (also known as a “Living Will”) may be a suitable alternative to a Health & Welfare LPA and your parents might want to look into this. It could even be used as an additional safeguard and run concurrently with a Health & Welfare LPA, but you have to be careful that the two do not conflict.
An Advance Decision is essentially a statement made by an individual to assist medical professionals in determining when certain medical treatment should be refused or withdrawn in the event of lost capacity. An Advance Decision deals with the refusal of certain treatments (whereas a Health & Welfare LPA covers both consent and refusal of life sustaining treatment). An Advance Decision is likely to operate best where there is a diagnosed condition with known treatment paths (so the individual can specify informed choices around what treatment they would refuse) and/or where they are not comfortable about naming an attorney to make decisions on their behalf. Whilst it is advisable to lodge the Advance Decision with a GP (for obvious reasons), there are no registration requirements and it can be quite easily updated and amended over time.
Where you have a close relationship with your parents, a Health & Welfare LPA is usually the preferred option. It offers more flexibility and you will be in a position to consider all the circumstances at the relevant time. Your parents can take comfort from the fact that a trusted family member will take a course of action that is in their best interests and in accordance with their wishes.
It is possible for your parents to put in place both a Health & Welfare LPA and an Advance Decision, but they need to think carefully about how the documents will operate together. A Health & Welfare LPA made after an Advance Decision will render the Advance Decision invalid if the LPA gives you authority to make decisions about the same treatment. An Advance Decision made after a Health & Welfare LPA will not revoke the LPA, but it will take priority in respect of the decisions it affects.
So what next?
If your parents have already put an LPA in place, then great. Make sure they keep it under review and if you think a change needs to be made in the future then you shouldn’t hesitate to raise this with them, even if there’s a little extra cost and hassle involved.
If your parents haven’t yet made an LPA, it could well be time to have that conversation with them. Explore the available options and take advice if you’re unsure about anything. The OPG website has lots of helpful information (A Guide to LPAs) and legal professionals with experience in this area will always be on hand to assist.
You may also like Caring For Elderly Parents – Best To Plan Ahead, Making A Will. Got One Yet? and What Not To Do With Your Pension Pot.
If you’d like to re-energize your midlife (and beyond), why not check out our Members Club? Just click the image below.
Matthew Peto qualified as a solicitor in 2014 and joined Stevens & Bolton LLP in 2015. Matthew advises on wills, trusts and estate planning, probate and estate administration and powers of attorney.