Following a recent survey carried out by Which? it has come to light that thousands of people are unaware of how the lasting power of attorney process works and how banks can often cause avoidable problems for people registering as attorneys.
A Lasting Power of Attorney (LPA) is a legal document where one person gives another the ability to make financial decisions on their behalf if they lose mental capacity.
At least 85% (1,700 people of the 2,000 surveyed) said that they know what an LPA is but 1/6 of people mistakenly think that an individual loses access to their financial accounts when the legal document is registered.
Which? said this might explain why just 1 in 7 would give someone else power of attorney over their affairs.
Among those surveyed who do not have an LPA, 7 out of 10 said they were healthy so did not need one while 3/4 of people incorrectly thought an LPA can be set up at any time in life.
An LPA can only be registered while an individual still has mental capacity ‑ after that it is too late.
Young people and those on lower incomes all showed lower levels of understanding of LPAs in the survey.
3 out of 10 people said banks were the most difficult to deal with, reporting that they lose documents, fail to properly explain the registration process or require unnecessary trips to a branch.
Which? Is urging the Office of the Public Guardian to improve awareness of and access to LPAs.
Our health and wealth have been abruptly brought into focus with the arrival of the pandemic, and this has also been a stark reminder that none of us knows what might be lurking around the corner.
One lesson we should all take from recent events is the importance of planning for the worst while hoping for the best. That means ensuring we have put in place arrangements in case of accident, sudden illness or death.
Most people understand the need to write a will but there is far less recognition of the importance of arranging a Power of Attorney, even among older people.
Research last year found that 75% of those aged 65-74 did not have a power of attorney compared to just 22% without a will. These legal documents are not just for older people.
Powers of attorney specify who the donor wants to have the legal authority to handle their affairs when they can no longer do so. Without one, even spouses or blood relatives may not have the legal authority to make decisions for them, including access to bank accounts or medical decisions.
This can be distressing for loved ones as the need to take over responsibilities can be urgent, such as when the donor has an accident or needs to go into a care home, and it can be more complex and costly to secure the authority later.
In England and Wales, a Lasting Power of Attorney (LPA) comes in two forms ‑ one allows the attorney to manage property and financial affairs, the other lets them make decisions about health, care and welfare. Scotland and Northern Ireland have similar power of attorney structures.
We can come to you, in the privacy and convenience of your own home, to discuss Wills, Trusts and Lasting Powers of Attorney. We will explain why they are important and suggest ways that you can put steps in place to give you peace of mind for the future.
By drafting a Will, Lasting Powers of Attorney or setting up Trusts, not only will your wishes be carried out as you would like but you can also protect your family and friends from costly and stressful legal disputes.