Young at heart have heads in the sand over old age

The number of over-65s is expected to increase by more than 40% within 20 years, with most of us likely to live well into our 70s and 80s.  This means a higher risk of living with age-related illnesses, such as dementia, and the real possibility of needing help managing our day to day affairs.

Whether it’s paying bills or taking decisions about long-term finances or care needs, the prospect of handing over control to someone else is leaving many paralysed by fear and refusing to plan. Many older people have their heads in the sand, believing they are far too young to consider the day when they can no longer handle things themselves.

“This can leave loved ones with extra stress and expense and means missing the opportunity to have your say on your how you would like your affairs to be handled when you can no longer do it yourself,” says Jan Atkinson, partner and head of private client at London law firm, Osbornes Law.

A Lasting Power of Attorney (LPA) allows you to appoint someone to make decisions on your behalf in case you lose the capacity to do so. Many of us put off making these arrangements while we are still healthy, forcing relatives to go through the Court of Protection to gain control of our affairs.

Jan explains, “It’s important to remember that an LPA can be set up in advance but does not have to come into effect until you lose capacity or decide it’s the right time. Think of it as an insurance policy, giving you and your family peace of mind.

“Taking early steps to arrange an LPA can give you more say over what happens and when.  It means you get to choose who takes over your affairs and give guidance on your preferences, such as preventing the sale of your home unless doctors believe you are no longer able to live independently.”

There are two types of LPA, one relates to property and finances, the other to health and welfare.

A financial and property LPA can include buying or selling property, managing bank, building society and other financial accounts, handling welfare benefits or tax credits, tax affairs, debts and legal proceedings.

A health and welfare LPA gives your attorney the right to make decisions such as giving or refusing consent to particular types of healthcare, including medical treatment, or deciding whether you should be cared for in own home or in residential care.

Jan says, “If you don’t grant an LPA and no longer have capacity, your loved ones will have apply to the Court of Protection which will appoint a deputy to take responsibility. This is a longer and more costly process and means you are not able to choose who that individual is.

“When granting an LPA you can choose which friend, relative or professional you want to manage your affairs.  This is particularly important if you fear certain family members are poor at managing money or are unlikely to follow your wishes.

“An LPA is relatively straightforward and inexpensive to arrange but applying to the Court of Protection for a deputyship is far more complex and time consuming. It will mean the deputy is subject to a higher level of supervision than an attorney under a LPA and will be required to complete an annual report to the Office of the Public Guardian to check that decisions are being made in the best interests of the individual.”

Top tip: When choosing an attorney it is usually sensible to choose someone younger, for obvious reasons, and not to choose someone who is a residuary beneficiary of your will, who may be conflicted when using your funds to pay for your care, if such payments are effectively reducing the money they stand to inherit.