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05th July 2018

Do I need Lasting Powers of Attorney if all of my assets are held jointly?

Firstly, what is a Lasting Power of Attorney? It gives someone the legal authority to act on your behalf if you either become unable to make your own decisions, or ask that person to help you out with implementing them.
It is a way to protect yourself and make life easier for your loved ones if you can no longer make decisions for yourself, perhaps because of a stroke, dementia, or an accident or simple frailty or lack of time.  It also helps if you simply don’t have time to do everything yourself or are out of the country.

You may already have an Enduring Power of Attorney which would have been created before October 2007 dealing with your property and financial affairs. In October 2007, the law changed creating two Lasting Powers of Attorney:–

  • one that deals with Property and Financial Affairs; and
  • one that deals with Health and Welfare.
It is possible to cancel an Enduring Power of Attorney and create new Lasting Powers of Attorney but it is not possible to create a new Enduring Power of Attorney, although the existing ones remain valid.

If an individual does not have the capacity to make a Lasting Power of Attorney, the alternative would be for someone to make an application to the Court for a Deputyship Order showing that they are the best placed person to act on their behalf. This process is long and expensive and it may not result in the individual’s first choice being in charge of their finances.  The Court would collect in the assets and be in charge of the majority of the funds. The Deputy would answer to them each year, meaning there would be ongoing costs – a precaution because you haven't chosen to trust that Deputy.

When considering assets in your estate, you have control of those assets whilst you still have capacity to make decisions on them. This is true for sole assets and assets held jointly with another person. If you stop having that capacity, you no longer have the ability to make these decisions and it is not always the case that someone holding assets jointly with you would have the ability to make decisions on those jointly held assets.

For example, if you hold a bank account jointly with your spouse or civil partner, and one of you loses the ability to make decisions regarding that account, the other person would not necessarily be able to take control of that account. Banks and Building Societies have tightened their rules greatly regarding accounts in joint names in order to protect the person who has lost capacity and we have found that they are likely to freeze the whole account until they have a legal document confirming who has the legal authority to act for that person. That would be either an EPA or LPA , if one had been made, or otherwise a Deputyship Order.

Another example would be if you owned your home jointly with someone such as a spouse, civil partner or member of your family. If one of you were to lose capacity, the other would not be able to sell the property, or any part of it, secure a mortgage on the property, or deal with an equity release without the assistance of an Attorney. If nothing is in place, it will be necessary to apply to the Court in order to do such a thing.  It’s necessary to show that the proposed transaction is in the best interests of the person who has lost capacity which is not always clear cut, can take time and will be more expensive than putting a Lasting Power of Attorney in place.

These examples do not take into account making decisions regarding someone else’s Health and Welfare. It is becoming increasingly more common that care homes and care providers will not speak to spouses or civil partners or family members when someone needs to go into care who has lost capacity. They will only discuss matters with someone who has a Lasting Power of Attorney in place for that person. So the choice is between relying on the doctors and social workers to make those decisions for you, or preparing a Health & Welfare LPA in advance.

If you are interested in setting up Lasting Powers of Attorney for Property and Financial Affairs and/or Health and Welfare or would like to discuss your Enduring Power of Attorney, please contact Alexandra Howard on 01223 447422 or click here to email Alexandra.

Please view our guidance notes which contain more information on Lasting Powers of Attorney and Health and Welfare Powers of Attorney.
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