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Report warns of impending ‘incapacity crisis’
A recent report published by Solicitors for the Elderly (SFE) and the Centre for Future Studies (CFS) has warned that the nation is facing an ‘incapacity crisis’, with millions leaving their fate ‘in the hands of strangers’.
It can be uncomfortable to think about what might happen if you were to lose the ability to make your own decisions about personal welfare or your finances. This idea resonates in the report, which found that over 75% of Britons haven’t discussed or thought about their personal wishes when it comes to healthcare, should they lose capacity.
Unfortunately, the combination of longer life expectancies, the prevalence of dementia and other conditions which cause mental incapacity and people’s general reluctance to plan for the future seems to be creating a perfect storm. Without proper planning, important decisions about your medical treatment, social care, business and finances might be left in the hands of strangers. It is important for all of us to address the looming crisis before the impacts are felt widely among families across the country and health services are put under even more pressure.
So, what can you do to plan ahead for your future? Lasting powers of attorney (LPA) can be a valuable form of insurance against temporary or permanent future incapacity. LPAs enable you to appoint one or more attorneys to step in and make decisions on your behalf if you are no longer able to do so yourself. The attorney could be a trusted friend, family member or (for a financial decisions LPA) a professional. There are two types of LPA:
- Personal welfare covers decisions such as where you live and what medical treatment you should receive.
- Financial decisions covers decisions such as buying and selling property, organising insurance, opening and closing bank accounts, investing assets and dealing with tax affairs.
Unexpected incapacity of a business owner can cause financial and operational difficulties for a business. It could, for example, result in no-one having authority to control the business account.
Whilst it may be appropriate to appoint a close friend or family member to deal with personal finances, that person may not have the best understanding of your business. Business owners therefore ought to consider making a separate financial decisions LPA.
If you lose capacity and have not made an LPA, an application to the Court of Protection may be necessary for an order appointing someone to act on your behalf. This process can be costly and time-consuming and the person appointed may not be the person you would have chosen.
So, if you are thinking of making a lasting power of attorney, don’t put it off any longer. Please contact me or any of our lawyers in our wills, probate & trusts department, who will be able to provide clear guidance and answer any questions you may have.
Simon leads our wills, trusts and probate team. He deals with all aspects of private client work such as trusts (including personal injury trusts), wills, powers of attorney, Court of Protection and estate planning and administration. Simon is a member of the Society of Trust & Estate Practitioners (including STEP SIG for mental capacity) and the Law Society Private Client Section. He is also a Dementia Friend. Independent legal guide The Legal 500 says he is "excellent in dealing with a range of issues surrounding inheritance tax".