Give someone power of attorney … before it’s too late
Friday, June 5th, 2009
Published: 3rd June 2009 Source: Harriet Mayer, www.guardian.co.uk
Power of attorney is being simplified and the cost is falling, so there’s no excuse to put it off any longer, says Harriet Meyer
Given that many of us will develop health problems as we get older, and may even be struck down in the prime of life by accident or illness, arranging for someone to have legal control over our finances and health decisions can be invaluable. This is known as lasting power of attorney (LPA).
Julie Hutchison, head of estate planning for Standard Life, says: “Putting a power of attorney in place is bread-and-butter financial planning, as it is the second most important document after a will.”
In order to hand over control of your finances to relatives or close friends through an LPA you need to complete a 25-page form. Introduced in October 2007 the LPA replaces its predecessor, the four-page enduring power of attorney (EPA), and was intended to be a more rigorous system that would eradicate abuses. Instead it has been beset by problems.
Completing the LPA form takes several hours of lawyers’ time and costs up to £1,000. “The forms are a nightmare,” Jeremy Curtis, partner at Pemberton Greenish solicitors says. “It’s so long and complicated to complete in its current form that it’s very difficult to get right.” The requirement to register the LPA with the Office of the Public Guardian, which is necessary for money and personal welfare matters, “makes the system hugely expensive and cumbersome”.
There have been “huge delays and cases where forms have been lost in the system” when trying to register power, according to Ruth Meyer, a solicitor at Boyes Turner. As a result of numerous complaints the system is being reformed.In April, the cost of registering the forms was cut from £150 to £120 following criticism that the price was putting people off; however, any changes to the form must go through parliament. Helen Clarke, chair of the wills and equity committee of the Law Society, says: “The target date for changes to the forms to be implemented is October, as they have to go through a legislative process and be piloted first.”
The Office of the Public Guardian is also making an effort to simplify its language. Martin John, the Public Guardian, adds: “We have reduced the risk of errors through improved design, and have included guidance to make completion simpler. Reducing the LPA registration fee demonstrates our commitment to provide a cost-effective service and to encourage take-up of such an important safeguard.”
The hoops you have to jump through may be frustrating, but it is best to appoint someone while you are still in good health. Most people expect to need such a representative only in extreme old age, forgetting that road accidents, for example, can happen at any time.
In Scotland, similar but more successful legislation has been in place since 2001, and more than 100,000 people have taken up the provision – among a population of just 5 million.
One way to bring down the cost is by making the big decisions before you see your solicitor. The most important two decisions are who you want to act as your attorney, and how broad you want their authority to be. You can have more than one person as your attorney, but you must be confident they can work together.
June 22nd, 2009 at 1:37 pm
I was considering cutting costs and completing the LPA forms myself but when I saw the forms I changed my mind! Managed to find a Solicitor who was charging a resonable hourly fee. He took all of the stress out of the form filling for me and at least I know that they have been completed correctly. It was still an expense I could have done without having but as the article states, having an LPA in place is an important safeguard.
October 28th, 2010 at 11:00 pm
Thank you so much for writing a lot of this excellent content! Looking forward to checking out more posts!