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Homemade powers of attorney – what can go wrong?

Contrary to what you might think, powers of attorney (LPAs) aren’t just for the elderly. They’re really important no matter how old you are.

lasting power of attorney

Laura Cowan

Even Money Saving Expert Martin Lewis agrees, saying that a power of attorney is more important than a will—and perhaps he’s right. After all, when we’re gone, we don’t need looking after. However, while we’re still living, we need to know that someone we trust will take care of our well-being (health and welfare LPA) and our finances (property and financial affaires LPA) if we can’t.

Your family and friends can’t automatically access your money, even if you trust them. If you don’t have an LPA, they’ll have to go through a time-consuming and costly process with the Court of Protection before they can handle any of your financial or personal issues.

Admittedly, an LPA may cost a few hundred pounds, and writing your own might seem like a money-saving opportunity in the short term. However, getting everything right with an LPA can be complex, and mistakes can occur with homemade ones. Here, Laura Cowan, head of Graysons’ private client team, discusses some of these issues.

Completing the forms

It might seem like the cheaper option to complete them yourself, but the application forms can be intricate. If there’s a mistake on the application when it’s submitted to the Office of the Public Guardian (OPG), it will be rejected and have to be resubmitted, incurring additional costs.

Even if mistakes aren’t found when the LPA is submitted to the OPG, they can be discovered when it’s used with banks and doctors, leading to rejection, delays and expense at precisely the moment when it’s most needed.

Being of sound mind

To create an LPA, the donor (the person creating it) must be of sound mind. A solicitor can assess mental capacity, but who ensures this with a DIY LPA? Vulnerable individuals may be pressured into signing documents. If it’s proved that the donor lacked the mental capacity to fully comprehend the implications of their actions, the LPA will be invalid.

Even if the donor possessed capacity at the time of creating the LPA but there are mistakes that need rectification or resubmission, the donor could have lost capacity by the time it’s addressed. In such cases, the proposed attorney would need to apply for a deputyship order – a lengthy and expensive process.

Attorneys

Appointing just one attorney is possible, though not recommended. What happens if the single appointment fails, perhaps due to the attorney’s own death or incapacity? Who would then represent the donor? The LPA would be invalidated. Even if two attorneys are appointed, it’s still possible for the LPA to fail if they’re jointly and severally appointed to act together. One attorney’s death or incapacity could render the LPA ineffective. Specialist advice is highly recommended when appointing attorneys.

Ensuring the LPA is done correctly

Once granted and registered, an LPA will generally be in place until you die, even if you subsequently lose your mental capacity.

Laura Cowan, head of Graysons’ private client team and longstanding member of Lifetime Lawyers says: “If you want to make sure everything is done correctly, it’s a good idea to get advice from a solicitor. They’ll make sure that you are giving your power freely and understand what you’re doing. They’ll also make sure that your attorneys know what they’re supposed to do and what the law says.

“Furthermore, solicitors play a crucial role in preventing fraud and abuse of power. If a solicitor doesn’t provide advice on the LPA, it becomes easier for it to be exploited. For instance, an unscrupulous attorney might persuade you to sign something you don’t fully understand or even misuse your funds for their own gain.”

Graysons’ private client team has many years’ experience in helping people ensure that their future is protected by professionally written LPAs.  Contact our experts now to discuss your requirements.

Author: Laura Cowan, head of Graysons’ private client team.

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