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Lasting Powers of Attorney, Joint Accounts and the Court of Protection

Lasting Powers of Attorney are the only method by which you can choose the person or people who will take over the management of your affairs if you lose the mental capacity to do so for yourself (for example as the result of a stroke or dementia). You can also choose how your Attorneys act for you, stipulating the decisions they can and can’t make and how the decisions should be made, including any guidance you wanted to provide them.

At Linder Myers, we consider Lasting Powers of Attorneys a key part of a person’s “lifetime planning”. Most people are comfortable with expressing their wishes for when they are dead but often neglect to consider matters that may affect them while they are still alive.

If you were to lose capacity then, without a registered Lasting Power of Attorney in place, no-one can legally deal with your affairs on your behalf without being appointed as a Deputy following an application to the Court of Protection. The process of having the Court of Protection appoint a person to manage your affairs is not always the horror story that it can sometimes be made out to be, but it is certainly the more expensive and time consuming of the two, and often when both time and money are in short supply.

We estimate that the costs of the application process, notwithstanding the yearly fees applicable to Court of Protection matters, taking into account Court fees, is easily three if not four times more expensive than creating and registering a Lasting Power of Attorney and can take around three to four months to finalise. This is for straight forward matters.

A further disadvantage of having to apply to the Court of Protection is that you have by then largely lost your say in the process. The Court will decide on your behalf who is the most appropriate person to take on the role of Deputy and this may not be the same person(s) you would have chosen had you made a Lasting Power of Attorney prior to losing mental capacity.

We are aware of instances where families have fought amongst themselves for the Deputyship appointment and cost the incapable person thousands of pounds.

A number of people believe they can get around having a Lasting Power of Attorney by setting up a joint account with another relative. There are a number of risks to doing this: firstly, if the relative died before the incapable party, the money would be frozen in the account until a deputy had been appointed by the Court of Protection. Secondly, if the relative went through divorce proceedings, became bankrupt or was in receipt of means tested benefits, then there is a risk that half of the funds could be exposed to claims from an ex-spouse, trustee in bankruptcy or Benefit Agency. Thirdly, if the account survived all of the above, it would not pass under the incapable person’s Will but automatically pass in full to the joint owner – this may not be what is intended to happen and we have had experience where families have fallen out over this. Lastly, if the account requires two signatures before any withdrawal of funds, as is common amongst building society accounts, as soon as a party loses capacity, the account becomes frozen. This has serious implications on not only the incapable person but also the joint owner who can’t withdraw their own money (if any) from the account without an order of the Court of Protection.

Having a Lasting Power of Attorney in place and registered is like having an insurance policy – you hope you will never need it, but if you do lose capacity then it makes dealing with your finances straightforward, at an otherwise difficult time.

Find out more about our Court of Protection department
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