Catriona Attride: How are you?
Fiona Debney: I'm not too bad, thank you. I'm looking forward to talking about powers of attorney and what we should have them for and who should have them.
Catriona Attride: Good. You're ready then. So do you want to start by telling us a bit about what a lasting power of attorney is?
Fiona Debney: Yes. Powers of attorney are a document that you prepare by selecting someone or more than one person who is then able to look after your affairs and to look after you if you lose the capacity to do so.
Catriona Attride: Is that for looking after your finances or actually looking after the person?
Fiona Debney: They are for both. There are two different types. There is one for property and finance and one that is used for health and welfare issues. They can be adapted so that they deal with business affairs as well, which we'll talk about a bit later. And just for completeness, there is also a limited power of attorney, which can be used for very specific events and only lasts for a year.
Catriona Attride: Okay. So tell me a bit about the power of attorney for finances and how and when it can and might be used.
Fiona Debney: Okay. These are called lasting powers and they are utilized when you do not have capacity. Now capacity can be mental or physical, and that can be either a permanent state or a temporary state.
Catriona Attride: But it is also possible, isn't it, that if you wanted the power of attorney to be used while you've still got capacity for finances that you can, but for health and welfare, it can only be used for the incapacity. That's correct.
Fiona Debney: So could the power of attorney for health and welfare is purely for incapacity issues, and those generally tend to be attributed to health or accident or degeneration of some sort in terms of your health.
Catriona Attride: And quite often people confuse living wills with health and welfare powers of attorney don't they? So a living will is an entirely different document. But our advice would usually be to put in place a lasting power of attorney for health and welfare because it's far more far-reaching. Would you agree?
Fiona Debney: I totally agree with that. And it also has the benefit of being registered. And that register is open to the public so that other people can tell whether or not you have such a document in existence, which provides you with some protection if you are making it so that the person that you have chosen is the person that is then making those decisions for you rather than someone else that is trying to step in and, through all good intentions, help you, but may not be the person that you've elected.
Catriona Attride: Yeah. So who should be doing a power of attorney? I suppose, particularly for the finances, is it a different age range for the property than it is for health welfare? Are these just for old people? Are they for younger people?
Fiona Debney: Okay. They are popularly touted as the prerogative of the elderly, but they should not be. Everybody should have a power of attorney because they are not just for, if you have Alzheimer's or dementia, but they are there to protect you if you were to have an accident. And so, for instance, young men who are out and about more and who participate in sports more, or who go out drinking, et cetera, are more vulnerable than some of the elderly who don't have quite such an active lifestyle. And therefore, they should also have a power of attorney in place, again, so that the correct person will look after them should they become incapacitated in some way.
Catriona Attride: Yeah. And I suppose it's that thing, isn't it? That health conditions can affect younger people, strokes and other medical things that might have you incapacitated, even if it's not for a long period of time, can happen to younger people, as well as older people. So, it's that thing of people often think that they're being really sensible doing their will when they're in their forties and fifties say, but actually, something could equally and more likely is going to happen to you that wouldn't actually result in your dying, but could result in you not being able to manage your affairs.
Fiona Debney: That's right. It's the what-if factor? What if this happens? What if that happens? And whilst a lot of people are reluctant to think about death, they are even more reluctant to think about what if I can't do something for myself. And it's that, that you are effectively guarding against. I think both you and I like to think of it in terms of, almost, an insurance policy. So everyone pays household, house insurance every year, without question. Hopefully, you haven't been flooded or you haven't had a catastrophic fire, but you still keep paying. And your power of attorney is a one-off insurance policy to make sure that the correct person, that you wish, then steps in to look after you, either on a temporary or a permanent basis.
Catriona Attride: Yeah. And I think that's the thing, isn't it? Because, I think a lot of people think that, Oh, well, it's okay. My husband or wife, or my partner can just deal with my bank account, or whatever, if I'm not able to do it myself. But of course, that's not the case. And you know, you could be in the middle of selling your house and something happens to you that takes you out of action. And the whole deal has to stop. Doesn't it?
Fiona Debney: That's right. That's right. And often your husband or your partner may not be the right person because they are too emotionally involved, for instance, to look after the finances or finances may just not be their bag. Someone else may be better prepared to do that. And it's also a possible strain on the relationship. So, if the incapacity is something that is life-limiting, some people simply want the time to enjoy that time together, whatever it is, and not have the stress of dealing with the finances as well.
Catriona Attride: Yeah. Absolutely. And I suppose if you've actually put a power of attorney in place, you can make the decision as to who is most appropriate. And also, you have the option of putting in, say your spouse or partner with another person acting alongside them jointly and separately, which means that if the special partner isn't feeling up to doing it, they've got someone alongside them who can take the burden.
Fiona Debney: That's right. That's right. And it's all about the support. Yeah.
Catriona Attride: Yeah, exactly. I mean, I think one of the things I often say to clients and, sometimes they can be put off a little bit by the cost of putting the power of attorney in place, is that the alternative is that, if you lose capacity, an application's going to have to be made to the court of protection for a deputy to be appointed to do the job for you. That means you've got no control over who's being appointed. And the timescales for dealing with this are four to six months. And during that time, nothing can happen. And moreover, the cost is three times, at least, more than if you'd actually just put a power of attorney in place in the first case.
Fiona Debney: Absolutely. And it becomes a bit of a race to the line as to who gets there first. And where we have blended families or second or third marriages, then there can be allegations of self-interest. You only want to look after his money because you want it to come to you. And it's far better to have put the thought in, first of all, to say, this is the person I choose for the following reasons, because they're good with money, because they're fair, and because they will put me first. And that is what it's all about, is the person looks after you.
Catriona Attride: Yeah, exactly. So, lasting powers of attorney were introduced back in 2007 to replace enduring powers of attorney. And there will be people listening who might well have an old-style enduring power of attorney. And it's worth pointing out the main differences between them. So, the enduring power of attorney was a very short four-page document, whereas an LPA, it's a 20-page document, but EPA wasn't as flexible. Was it? Because you could only appoint your attorneys, you couldn't appoint replacements?
Fiona Debney: That's right. So EPA, enduring powers of attorney, were for finance and property only. So they don't cover the health side of things. And once you had made your nominations, that was it. So something happens to the person that you've nominated, then that power of attorney comes to an end. And you are then at the mercy of an application to the court for a deputy rather than having chosen your first person and then your backup team, which you can do under your lasting powers.
Catriona Attride: Yeah. And I think another advantage of lasting powers of attorney... And I think it's fair to say, we were all a bit dubious when they first came in and we all did manage to get people doing enduring powers of attorney, but now, you know, 13, 14 years on, I think we can see the benefit of them. If that, when you do a lasting power of attorney, it has to be registered with the guardian before it can be used. So we register them immediately and put them in the cupboard. So it's ready to go. The trouble with an enduring power of attorney is, is that you couldn't register it until the person had lost capacity. And therefore, at the exact point that you need to use it most, is the point where you've then got to go through, quite, what is a laborious process for registering an enduring power of attorney and habitat of action for six to eight weeks while that's happening.
Fiona Debney: That's right. And then there is also the risk that, because you could use the enduring power of attorney with the consent of the person that's donated it, that consent just continues when someone has lost capacity because nobody informs the relevant institutions that the capacity has gone. So, that was the primary reason for the change, is it was felt that that was open to abuse. Whereas- [crosstalk 00:11:59]
Catriona Attride: Yeah, absolutely. I think it's that thing of open to abuse, but also just lack of awareness, you know, someone's using the EPA, just, haven't got a clue that actually suddenly they're in breach of the law, because they still use it and haven't registered it when someone's lost capacity. So the way the system works now is much clearer. Isn't it? It's registered. Therefore, it can be used and you're done.
Fiona Debney: That's, that's entirely correct. And the best advice is to register it as soon as you have made it, because the benefit is having it there, sitting in the background, ready to go. It doesn't allow someone just to step in and ride over your life, but it stops the delay and the delay can lead to extra stress for your family members. When it means, for instance, that care fees are stacking up. If they are due and owing, or they can't get to your bank account and they need to pay bills. And whilst financial institutions are better than they used to be, and are more understanding, and some even have dedicated units, there is still the pressure of, this money is due and owing. And it's not what you need at that time.
Catriona Attride: Absolutely. And while we're on the subject of financial powers of attorney, you mentioned at the beginning, the fact that you can include special provisions for where you are in a business. So for example, if you're in a partnership or you've got shares in a limited company or sole trader even, how can you adapt or use a power of attorney for that? And do you have separate ones or can you use the same one?
Fiona Debney: Okay. So, the best advice there is to use the power of attorney for property and finance, but effectively, you have two of them. One will say that it is limited to your personal affairs and is to be read in conjunction with the other version of that document, which is limited to your business affairs. So quick example would be a partnership and husband makes two, one where the wife is responsible for looking after his personal affairs, but one where he nominates someone that has worked within the business or the industry to look after the business affairs, because the wife, quite frankly, isn't interested or doesn't have the experience to make decisions on his behalf, in the context of the business.
Catriona Attride: Yeah. So they're quite valuable, aren't they? Because the two things are very distinct. Aren't they, the personal side and the business side?
Fiona Debney: They certainly can be. And to enable the business to continue and, possibly, to supply the income that's needed, those business decisions need to be taken. And it's important that they are taken by the correct people.
Catriona Attride: Yeah, definitely. And then if we just talk a little bit more about the health and welfare LPA. So, I think it's quite useful to have some examples and, actually, I've seen health and welfare powers of attorney be required more, but also, in my own family, I've seen them used to quite a lot of success. So my grandfather’s years, several years ago, was having lots of trips and admissions to hospital because he was having infections that were making him present as though he was losing capacity. But, because he was in his eighties, there was just this assumption that "Oh, well, he's just old. And therefore, he doesn't have capacity." And you would keep saying to them, but no, he was okay. You know, three days ago. The fact that he is hallucinating now is, completely, a new thing.
Catriona Attride: And, you just weren't getting the attention and the ear that you needed as a family. So, we had one in place, and my aunt actually had it. And it was amazing, once she had that and was able to present it as his representative, while he wasn't able to make sense of things. And they did, then, really listen and they got to the bottom of what was wrong and treated appropriately and didn't just write him off. And I think that can often be the feeling and the sense, can't it, with older people in particular, which health and welfare powers tend to be more used by older people. Although they can, obviously, be used by younger people who've had some sort of catastrophic injury or severe serious injury. But they do give you a voice.
Fiona Debney: They do. There's nothing like being armed with a piece of paper when you go in to speak to the medical profession or someone within social services. And, I think it probably gives you the confidence to speak up more, but it also means that they appreciate that the person that you are all talking about, has taken the time and the effort to say, I want this person to speak on my behalf and you should listen to them. On that basis, it's really important to consider doing both together.
Catriona Attride: Yeah. Yeah. And, the other place where I've seen them being used, with clients actually, is care homes. So where a family ] perhaps, aren't happy with the care plan that's in place or what's happening, the care home will turn around and they will hide behind, do you have an LPA for health and welfare? And if you don't, it definitely diminishes the family's voice on behalf of the family, in some cases, it's not to say in all cases. But I do also think that it is definitely worth having one in place for that so that you have made sure that your family can represent you when it comes to how you're being cared for in the residential setting, for example.
Fiona Debney: It also stops the confusion over a much-used term, which is next of kin. Next of kin simply means the person to notify. It doesn't have to be a family relative or someone that's close blood relative or spouse. So, sometimes next of kin will be put down for instance, as a daughter. And actually, it's the spouse that wants to have the input because they know them the best and they live with them and they've seen what's happening. And if someone is down as next of kin, it's very hard for someone else to go in then, and say, but you should be listening to me. But, the power of attorney gives you that authority to do it.
Catriona Attride: Yeah, it does. Because I do think that there is a big misconception of what next of kin means and the power it gives you because it actually doesn't give you any authority or power. Because quite often, when I would talk with one about doing a power of attorney, so, "But it's okay because so-and-so's my next of kin." No, that's not anything when it comes to either trying to manage your finances or manage your care when you're not able to do it for yourself.
Fiona Debney: That's right. And what it does do, then, is save an awful lot of arguments and hurt feelings amongst your family that are around you at the time.
Catriona Attride: Yeah. So the lasting power of attorney for health and welfare is also quite flexible in the sense that it gives you one of two options, doesn't it, in terms of signing. So you can either give consent for your... You can either give your attorney permission to make decisions about end of life life-sustaining treatment or not give them the permission to do that. And so, again, there's a bit of a decision to be made around there. And I often say to clients, it's really quite important that you actually talk to your attorneys about what your views are. Do you want treatment to continue as long as it can, or do you feel that it gets to a point where you would want it withdrawn? What are your views on end of life? Which can be quite a tricky conversation to have. I know I actually had a client where we got to the point of signing a power of attorney with the daughter appointed. And she just said, "Actually, I can't, I won't be able to do this. I won't be able to make this decision because I'm [inaudible 00:20:18] to be able to make that decision." So actually, they ended up appointing the son-in-law, who was much more open to making the decision. I think it is important to have honest conversations. Isn't it?
Fiona Debney: I think it's important to have the conversations, but it's also important to realize that you don't have to have the same people. So who, someone who may be good at finance and who you trust with your money and that they're going to have a handle on it and use it appropriately, may not be the same person who can actually make the decision, yes, remove life-sustaining treatment, or you might feel they might be a bit harsh. And you actually want someone a little bit softer who will say, well, I know that they were quite prepared to give me the decision, but they would like me to take that decision after a period, for instance, of three months. Let's see how they go, and then we'll take that decision. So, it's picking the right person to carry out that task at a time when they are going to be upset about having to do so.
Catriona Attride: Yeah, exactly, exactly. And I think it's fair to say that often when it comes to the end of life in hospitals, the doctors and the medical team actually do work really well with the family and do have honest conversations. And it isn't always a really difficult process. But this, again, the insurance policy side of this is that it's there if things aren't quite going as you would have hoped or are a bit more difficult than you would have thought they would be.
Fiona Debney: Absolutely. Medical discretion is there. And in most cases, nearly all cases, will not be overridden. And we've all seen the court cases where someone has gone to court either to say, I want the right to end my life or where a doctor has decided that life-sustaining treatment will be removed and someone else's objecting. But again, with the power of attorney, you have that extra voice to speak with, and the medical profession will include you then, in all the debate that goes on.
Catriona Attride: Yeah. Which I think is really important for families, isn't it, or friends. This is the point, you don't... It doesn't have to be a family member. There are cases where people don't have close family who would be appropriate to a point. So they might go for a friend. And I think it is worth noting that if you really struggle with someone to a point, we can act as individuals. We can act as professionals, as attorneys, and, probably more on the property and finances than the health and welfare, because we wouldn't normally be around directly in those things. But I have had some clients who I've worked with a lot over the years, I have accepted the appointment as an attorney for health and welfare. And then I have been involved in making decisions around care and where that care should be taken and where they should live and that sort of thing. But it is quite a responsibility for whoever takes it.
Fiona Debney: It is. And it's a huge responsibility on a family member, just as much responsibility on a family member as well, which is why part of the process for making it is that whoever you are appointing has to sign to say that they agree that they will do it before the document is with the court. Because it's not something that you should be springing as a surprise on someone. It is something that they've got to buy into and understand what you want them to do should they have to be able to take that step for you. And again, it's all about having that discussion. A lot of people will talk about what they want at their funeral, but back away from the discussion as to what type of care home or what standard of care or when they would like their life to be terminated. What would be the circumstances? That's a discussion, again, that needs to happen as much as, "When I die, I would like you to have that ornament."
Catriona Attride: Hmm. And so I think if we just very briefly talk about the practical aspects of putting in place, an LPA. I mentioned before, it is a 20-odd-page document. And there are a lot of boxes to fill in. And there's often a school of encouragement that says, you can do these yourself, and you can register these yourself professional help. But I have seen so many clients get themselves in a muddle with these forms because there are a lot of boxes to fill in, but there were a lot of boxes that need signing and dating in the right order, in the right way. And if you haven't done it properly, then it gets rejected. And sometimes you have to start again because it's not just you having to sign it. It's your attorneys having to sign it as well. There are lots of moving parts there that can sometimes go wrong if they're not being supervised. And you've also got the certificate provider who has to add their signature, haven't they? You, do you want to mention what that's about?
Fiona Debney: Yes. Certificate provider is one of the ways that the court makes sure that you want to enter into this document, that you are doing so as your idea, that the person that you are appointing is your choice and that you are effectively not being forced into something. And that you understand the power that you are potentially giving your nominated person when they step in to look after your affairs. The court set out the order in which they would like the different signatures to occur, but it's very easy to get the dating of those wrong, in which case the application is sent back. And in some cases, does mean that you have to pay a second or a third fee if, again, the order of signing doesn't flow in the way that it should.
Catriona Attride: Hmm. Yeah. So it's important that they're done properly.
Fiona Debney: It's also very important when you are making sure that someone signs. That if I, for instance, have appointed you as Catriona Attride, but actually, your full name is Catriona Mary Attride. If I just put Catriona Attride down, but you sign it C.M. Attride, then the court will query that and say, is it the same person? So again, it's the detail, that's required when filling in the form, that is very important.
Catriona Attride: Yeah. I mean, luckily, I don't have a middle name, so that makes life easier. Yes. That is definitely a thing.
Catriona Attride: That's a really useful summary, actually, of what lasting powers of attorney are about. And I think that will hopefully give people a bit of food for thought and give them a bit of a better idea of why they would need them. But, I think the message I would want people to take away is, is that these are for everybody. If you are an adult, really, you should be thinking about having a lasting power of attorney in place. And because we have the opportunity to appoint at the first level and then replacements, we can future proof the documents so that it should last you quite a long time, so that you're not having to keep changing it and revoking it and going through the cost of doing a new one.
Fiona Debney: I agree. And the default position, if you're not happy, in years to come, with the people that you've appointed, is that you effectively tear up, through the court, your first one, and you make another one. Yes, there are fees to pay again, but it doesn't mean that it's absolutely fixed forever.
Catriona Attride: No. And I think that the cost of registering a power of attorney is currently 82 pounds. So if you've had to pay that even every 10 years, it's not a large amount of money that would prohibit you from doing that. Because quite often what we have is people who've got young children, so you wouldn't want to appoint them, but they might want to come back and put them in later. So that's an example of when you might want to review it, I suppose.
Fiona Debney: Absolutely. And it just means that it's flexible, but it meets your lifestyle and what is happening in your life at that particular moment.
Catriona Attride: Definitely. Well, thank you very much for your time today, Fiona. That's been great. And hopefully, our listeners will take some benefit from this. And if anyone wants to know more about it, they can contact either me or you, Fiona, and we'd be happy to help them further.
Fiona Debney: Excellent. That's right.
Catriona Attride: Thank you.
Fiona Debney: Thank you. Thank you for listening to Talking Family and Wealth. To find out more about the series, please visit gateleyplc.com/talkingfamilyandwealth. From here, you can subscribe for all updates, meet our speakers, and get more information on all of the topics being discussed.