Dementia and Lasting Powers of Attorney

Scientists are developing tests that can identify those with a higher than average chance of developing dementia in later life. Would you want to know? We could easily be forgiven for ignoring the possibility that it could happen to us.

According to figures from the Alzheimer’s Society there are over 700,000 people in the UK suffering from dementia and this is set to hit 1,000,000 by 2025. A sad consequence of dementia is that in many cases there is a loss of mental capacity and an inability to manage their financial affairs, or make important welfare decisions.

Despite this, research shows that 3 out of 4 people have made no arrangements to enable someone to manage their affairs should mental health make it impossible for them to do so. It can be difficult and time consuming to unfreeze the assets of a family member who suddenly becomes mentally incapable. Fortunately the law has been changed to make it easier for people to prepare for this eventuality.

The Mental Capacity Act 2005 made provision for an individual to choose someone to manage their affairs should they become incapable of doing so themselves through a document called a Lasting Power of Attorney (LPA). Lasting Powers of Attorney replaced Enduring Powers of Attorney (EPAs) in October 2007 although EPAs made before this date are still valid.

There are two forms of Lasting Powers of Attorney which are separate documents. Firstly there is one for “property and affairs” which enables someone you trust to make decisions on your behalf in relation to the management of your financial affairs, which may include paying your bills, collecting your income and selling your home. There is also a “personal welfare” LPA which allows the person you have chosen to make welfare decisions on your behalf, relating for example to consent for medication or life sustaining treatment.

The LPA has to be registered with the Office of the Public Guardian before it can be acted upon which makes it more secure and less open to abuse. It also needs to be accompanied by a certificate signed by someone such as a solicitor or doctor confirming that you understand what it means to grant someone power of attorney over your affairs and that you are entering it freely.

If someone does become mentally incapable and there is no provision in place for an LPA or EPA then the Court of Protection may appoint a deputy to make decisions on your behalf but this is more expensive, time consuming and uncertain. There is a court application fee of £400, a requirement for a medical report and an insurance bond to cover the possibility of mismanagement of funds. It is payable annually and could run up thousands of pounds unnecessarily.

A further consequence of dementia is that many sufferers at some point may need to enter long term care. Whilst the sufferer continues to live with their partner or family, this might not be an urgent concern. However if the dementia sufferer is the survivor of the partnership, long term care may be required. Broadly speaking if someone goes into care and has assets worth more than £23,250 then care must be paid for privately. Nursing care can be £700 to £900 per week. Accordingly before dementia becomes too advanced, it is important to consider protection of assets to prevent these assets being sold or used to pay for what may be many years in long term care.

For more information or advice about Lasting Powers of Attorney please contact David Lea.