One Document Could Save You from Financial Ruin

The 2024 Channel 4 episode of 24 Hours in Police Custody, “Living the High Life,” revealed something deeply troubling.

Alan, a 71-year-old man, one day entrusted his niece, Sacha, with his bank card to help pay his care home fees.

Within weeks, she had set up online banking without his consent and over 18 months, fraudulently stole over £200,000 from the proceeds of his house sale to fund her drug habit, with the money meant to fund his care.

By the time the police discovered the fraud, Alan had only £20 left in his account. He could no longer afford the one thing he wanted most: a comfortable new armchair for his room in the care home.

This heartbreaking case highlights a crucial truth: even when you’re mentally capable, financial abuse can still happen. Alan was utterly unaware that she had set up online banking, was making cash withdrawals, and his life savings were quickly being depleted. He only found out when the police arrived at the care home to speak with him.

Many instances of financial abuse, like this one, or cases where caregivers have stolen funds, could have been avoided with the right safeguards in place.

By setting up a Lasting Power of Attorney (LPA), you can appoint multiple trusted individuals to manage your finances if the need arises.

Appointing more than one attorney not only enhances transparency but also establishes a system of checks and balances, allowing them to oversee each other’s actions and deter misuse.

All attorneys are legally bound to act in your best interests at all times, with safeguards in place to challenge or report any misconduct.

Yet thousands of people remain vulnerable simply because they haven’t taken this essential step to protect themselves and their loved ones.

The Misunderstanding That Leaves You Vulnerable

Many people avoid setting up an LPA because they believe they’re “giving up control.” This couldn’t be further from the truth.

An LPA is a preventative legal measure, just like making a comprehensive Will. You retain complete control of your affairs, and they can be used with your consent or when you lose mental capacity. The key difference is that you decide exactly who can act on your behalf and how.

When you create an LPA, you’re not surrendering your independence. You’re ensuring the right people have the legal authority to step in immediately or when required. Your spouse, adult children, or a trusted individual won’t have to fight through red tape and the courts while you’re vulnerable.

Mental Capacity

Being independent is something we often take for granted, yet it can disappear in an instant. Loss of mental capacity isn’t just about ageing or dementia. Consider these sobering statistics:

• One in four strokes in the UK affects people under 65
• Over 42,000 people under 65 live with dementia in the UK
• Accidents can strike anyone at any age, potentially affecting their ability to make decisions

Without a Lasting Power of Attorney (LPA), many people are still surprised to learn that even their spouse cannot automatically access joint accounts if they lose the ability to make decisions due to a lack of mental capacity.

Social and healthcare services will notify banks and financial institutions, which will lock out even the closest family members, regardless of the urgency of the situation.

The Court of Protection: A Slow and Costly Last Resort

Without an LPA, the Court of Protection becomes your family’s only option if you lose capacity. This process is:

Lengthy: Applications typically take up to or over 12 months to process

Expensive: Costs can exceed £3,000 in fees, plus ongoing annual supervision charges

Intrusive: Detailed medical assessments and court hearings are often required

Uncertain: The court may appoint someone you wouldn’t have chosen yourself

During this lengthy process, your loved ones will be unable to access your accounts, sell property, or make crucial care decisions. Meanwhile, you remain financially vulnerable, exactly when you need protection most.

The Court of Protection receives over 20,000 applications annually, many of which could have been avoided with proper planning. Don’t let your family become another statistic in this complex and archaic process.

Complete Protection

There are two types of LPA, and most people need both:

Property and Financial Affairs

This covers decisions about:

• Paying bills and managing bank accounts
• Claiming benefits and pensions
• Buying or selling property
• Making investments
• Managing any business interests

Crucially, this LPA can be used immediately once registered with your consent, even while you retain full capacity. This makes it invaluable if you’re temporarily unable to manage affairs due to illness, travel, or other circumstances, with COVID being a very real example of this.

Health and Welfare LPA

This covers decisions about:

• Medical treatment and care options
• Where you live and with whom
• Daily routine, including diet and dress
• Life-sustaining treatment decisions

This LPA can only be used once you’ve lost mental capacity, but it ensures your chosen attorneys can make vital care decisions according to what you would have wanted, like whether to be cared for by near family members, at home, or what you would want your day to day life to look like.

Real Protection Requires Professional Guidance

While it’s technically possible to complete LPA forms yourself, the stakes are too high for mistakes without the correct advice and direction. Common errors include:

• Choosing inappropriate attorneys or failing to name replacements
• Mistaken instructions about joint decision-making
• Missing signatures or witness requirements
• Inadequate consideration of potential conflicts of interest

A single mistake can render your LPA invalid precisely when you need it most. Professional legal advice ensures that your documents are correctly prepared, registered, and will work as intended when required.

The registration process alone can take anywhere from 3 to 12 months, with the Office of the Public Guardian receiving an average of 67,000 applications each month.

If there are errors or queries and you lose capacity before they’re resolved, your LPA may become unusable. This is why you must create these documents now, while you are fit and well.

Your Choice, Your Control

Making an LPA isn’t about planning for incapacity; it’s about maintaining control over what happens if you can’t make decisions yourself. Like wearing a seatbelt, it’s protection you hope you’ll never need.

But if the worst happens, it makes all the difference between your family having immediate legal authority to help you or watching helplessly from the outside while red tape and legal requirements delay crucial decisions.

Protect Your Future Self Today

Alan’s story from “Living the High Life” shows us what can happen when financial safeguards aren’t in place. While he did have mental capacity, he entrusted his niece, but could have appointed another family member or professional attorney, such as a solicitor, accountant or financial advisor, to ensure his finances were handled appropriately.

Don’t leave your loved ones in the same vulnerable position. An LPA gives you control over who will have the power to enforce your wishes, even if you can’t voice them yourself.

The question isn’t whether you’ll ever need an LPA; it’s whether you’ll have one in place when that need arises. Make the choice now, while you still can and remove any future burden from your family, at what may be an already difficult time.

Contact our friendly team today to arrange a complimentary consultation with one of our private client advisors to learn more about how these crucial documents work and how they can protect you.

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Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal, financial, or professional advice. No responsibility is accepted for any action taken or not taken based on the content of this article. Readers should seek appropriate professional advice tailored to their circumstances before making decisions. April King Legal will not be held liable for any loss or damage arising from reliance on this information.