Lasting Power of Attorney system to be modernised

Two women sit at a desk reviewing documents: by Gabrielle Henderson/Unsplash

The UK Government has launched a consultation, open to everyone, on proposals to modernise and streamline the Lasting Power of Attorney (LPA) system. It is open until October 13, 2021.

LPAs are powerful legal documents that allow someone to appoint people they trust to manage their affairs and make decisions on their behalf if they cannot do it themselves. LPAs were introduced in 2007 and replaced a previous Enduring Power of Attorney (EPA) system that had existed since 1985.

Why should I have a LPA in place?

You may have come across LPAs in the context of supporting elderly relatives. If someone develops a condition such as dementia or Parkinson’s disease, or has a stroke it means someone else can step in and manage their day-to-day affairs.

But LPAs can be an important safeguard for people earlier in life as well. Many people assume that if, for example, they had a serious accident and were in hospital in a coma, their spouse or another close family relative would be able to pay bills etc. on their behalf. This is not the case.

For this reason, owners of small businesses may want to think about having a Lasting Power of Attorney in place so that their business could continue to run and suppliers and any employees would be paid.

Without an LPA in place, your family usually has to apply to the Court of Protection to have a deputy appointed to deal with everyday financial matters. This is a slow process and costs thousands of pounds.

Any joint bank accounts you hold with your partner could become severely restricted if they become mentally incapable (permanently or temporarily). This could result in many problems if the joint owner has their income or pension paid into this account, or they use it to pay critical bills such as a mortgage.

What can an LPA empower your attorney to do?

There are two types of LPA in England and Wales:

  • A Property and Financial Affairs LPA gives a trusted person the authority to handle your bank accounts, investments, bills and property.
  • A Health and Welfare LPA covers decisions about your health and care.

A property and financial affairs LPA would allow your attorney to open, close or operate your bank accounts, pay bills, claim pensions, make or sell investments and property or, in some cases, run your business.

A health and welfare LPA allows your attorney to make decisions about your medical treatment and care. They can authorise or refuse life-sustaining treatment and make decisions about your daily care routine, for example washing, dressing and eating and where you live.

Who can be an attorney?

An attorney needs to be 18 or over and mentally capable of making their own decisions. You could choose your spouse or partner, a relative or friend or a professional person such as your solicitor.

If you’re appointing more than one person, you must decide if they’ll make decisions:

  • separately or together – sometimes called ‘jointly and severally’ – which means attorneys can make decisions on their own or with other attorneys
  • together – sometimes called ‘jointly’ – which means all the attorneys have to agree on the decision

How are LPAs administered?

The Office of the Public Guardian (OPG) was set up in 2007 to administer and maintain a register of LPAs. It replaced the previous Public Guardianship Office.

Today, there are more than 4.7 million LPAs and EPAs on that register. Around 917,550 of those were registered in 2019/2020 alone. Perhaps some of this increase was fuelled by the COVID-19 pandemic when people realised that banks and other organisations would only deal with the named account holder if a relative became so ill that they could not manage their own affairs?

The OPG says that about 40 per cent of the adult UK population have a will, but less than 1 per cent have a Lasting Power of Attorney.

LPAs can only be used after the application forms have been completed, signed and registered at the OPG.

Why does the Government want to change the LPA system?

Over the years there has been some criticism of the LPA system.

Rebecca HeadRebecca Head, director and Wills & Probate solicitor at Four Oaks, is a member of the national group, Solicitors for the Elderly which says that with the right advice, powers of attorney can act as important safeguards.

She said: “An LPA can be a positive and effective legal tool, which ensures your wishes are respected should you ever lose capacity. But there is a clear need for professional advice when considering powerful legal documents of this nature.”

Currently, each LPA is over 20 pages long and needs a minimum of six signatures. The complexity of the system results in a high rate of mistakes, which cause delays, and can put people off from setting up an LPA.

Although LPAs can be created online, the legislation requires the completed forms to be printed out, physically signed and witnessed and then posted to the OPG for registration. This led to around 19 million sheets of paper being received by the OPG in 2019/20 alone, with a similar number of sheets being sent out to the public.

Delays caused by mistakes can cause heartbreak and stress for families if the person the LPA is being created for (known as the donor) loses capacity before the registration is completed. This makes any LPA invalid and the family then has to go down that expensive and time-consuming route of applying to the Court of Protection instead.

What changes to LPAs does the Government propose?

Greater digitisation could reduce errors, says the Government, as well as cutting down drastically on paperwork and speeding up the process for everyone.

Another proposal would replace physical witnesses with a digital ID verification and signature procedure.

Currently, people can complete an LPA and sign it but NOT submit it to the OPG for registration until they need help from their attorneys. At that stage, many LPAs are rejected for mistakes and by that time the donor may have lost mental capacity. So, the Government is considering changing the law so that LPAs must be registered immediately or, alternatively, introducing a system of checks at the signing stage to reduce errors.

There is also a proposal for a fast-track service at a premium price for those who need an LPA urgently.

The old EPA system made it compulsory for an interested party to be notified that the document had been signed, as a way of ensuring there were no concerns that either the donor DID NOT genuinely lack capacity or they had come under undue pressure to sign. This was removed from the LPA but the Government is now looking if there needs to be a way for people to be made aware of an LPA application being made so that they can object.

If you would like to take part in the ongoing consultation, more details are available here – https://publicguardian.blog.gov.uk/2021/07/22/modernising-lasting-powers-of-attorney-safer-simpler-and-fit-for-the-future/

Rebecca added: “While we wait for the outcomes of the Government’s consultation, it remains important to get expert legal advice on whether an LPA is right for you and to ensure that time-consuming mistakes and delays are not incurred.”

If you would like to talk to Rebecca about LPAs, please call her on 07961 576 780.

Universal Wealth Preservation

Were you a client of Universal Wealth Preservation?

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Four Oaks Legal Services have been made aware by the Society of Trusts and Estates Practitioners (STEP) that they have received an unprecedented number of enquiries about Mr Steven Long and the companies of which he is a Director, namely Universal Tax Solutions which traded as Universal Wealth Preservation. Associated companies also include Universal Asset Protection Ltd and Universal Trustees Ltd.

Mr Steven Long, his Wife Mrs Melanie Long and Universal Trustees Ltd have acted as Professional Trustees for many clients. Universal Wealth also assisted clients with the drafting and management of trusts; drafting wills and lasting powers of attorney (LPAs); as well as providing  storage of original documents.

STEP have confirmed that they suspended Mr Long’s membership back in November 2017, pending the outcome of investigations into the numerous complaints they received.

Universal Asset Protection entered into compulsory liquidation in May 2018, although the business premises of Universal Wealth Preservation was closed several months before this time and the website is no longer active.

Four Oaks Legal are aware that many people have experienced great difficulties in attempting to contact Universal, with no responses to emails, letters or phone calls made.  Those clients have been concerned about the management of their trusts and have been unable to ascertain the whereabouts of their assets, or retrieve original wills and LPAs held in storage by Universal.   Some clients have discovered their LPAs have not been registered with the Office of the Public Guardian (OPG), although they believed they had.

We are aware that Suffolk Police are in the process of investigating Mr and Mrs Long, and they have seized all documents that were held at the businesses premises.  Universal clients now face the realistic prospect that they are unlikely to retrieve original documents or to recover cash assets.

What should you do now?

The advice STEP is giving to Universal clients is as follows:-

  • Seek independent legal advice from an experienced trust and estate practitioner on your options, which may include how to make an application to the courts to replace Mr and Mrs Long/Universal Asset Protection Ltd as trustees, making new wills and LPAs.
  • Check whether Lasting or Enduring Powers of Attorney have been registered with the Office of the Public Guardian – call the OPG on 0300 456 0300.
  • If you are not in possession of an original will held by them, make a new one without delay.
  • Contact the Land Registry to ascertain in whose name your property is registered. Call the Land Registry on 0300 006 0411. The Land Registry is aware of the issues with Universal.
  • If appropriate, consider whether to make a report to Action Fraud quoting ‘Operation Ardent’.
  • If concerned by marketing information received or direct approaches from other firms advising you to use their services, consider taking advice from Trading Standards/Citizens Advice Bureau.

If you are affected by any of these issues with Universal, please contact Rebecca Head or Joanna Parkin on 01543 440 308 and they will be pleased to discuss your options with you.

Can I get a copy of a deceased’s Will?

A question that our probate team often get asked is “Can we get a copy of a Will after a person has died?”.

Can I get a copy of a Will?
Can I get a copy of a Will?

If an estate requires a Grant of Probate then the deceased’s original Will is submitted to the Probate Registry and is retained there.  The Will then becomes a public document and anyone, upon payment of a small fee, can apply for a copy of it.

You can find out if a Grant of Probate has been obtained, and order a copy of a Will, by using the Gov.UK search tool here:-

https://probatesearch.service.gov.uk/#wills

If an estate does not require a Grant of Probate, the Will remains a private document and only the Executors of the estate can then agree to release a copy.

 

 

 

Court of Protection to Refund Overcharged Fees

Following the successful refund scheme for registration fees in relation to Lasting Powers of Attorney, the Ministry of Justice have now announced that some Court of Protection fees are also to be reduced.  An internal review found that the fees are higher than necessary to recover court costs. Therefore, a refund scheme will be set up to reimburse people the amounts they have been over-charged. Details of the scheme are yet to be published.

Property Trust Wills

An increasing number of people are worried about the possibility of needing care in the future and the financial impact that may have upon their assets. Protective Property Trusts in your Will can enable a couple to save part of their property to pass onto their family.  These types of Wills are also sometimes called Property Trust Wills.

What is a Property Trust Will?

A property trust is a type of legal structure that can be included as part of your Will and is designed to protect your share of jointly owned property from being included in financial assessments that are carried out to determine how much you should contribute to long-term care fees. The structure can also be useful should you be worried that your spouse might re-marry in the future by protecting your share of the property for your family.

A property trust will covers a share of a jointly-owned property to ensure that a surviving spouse or partner can still benefit from their deceased partner’s share in the property even when they are gone.  Should the survivor have to go into long-term care, their deceased spouse’s share will be protected – and can be passed onto family members upon their death.   

Most couples when making a Will, leave their assets directly to their partner. Should the partner require care, this can mean that there are less assets to pass onto the family after their death.

For this reason, Property Will Trusts can hold assets on behalf of the partner to guard against deductions made due to care costs.

How Does It Work?

The best way to explain how Property Trust Wills work is through an example:-

Let’s say Mr and Mrs Marr jointly own their home. They want to ensure that their respective shares will be passed to their two children when they pass away.  They want peace of mind that if the survivor of them needs care, at least half the property can be passed to their two children.

If Mr Marr dies before his wife, his half share in the property will go into the Property Trust set up in his Will – with the remainder of his estate left to Mrs Marr. She then has the right to occupy the property or move house if she wishes. If she requires long-term care in the future, her Husband’s share of the property remains in trust and cannot be taken into account during any financial assessments to determine what she will need pay towards her care.

In short, 50% of the value of the property cannot be taken and used to pay for her care fees.

This type of trust covers every eventuality. Even if Mr and Mrs Marr’s children divorce, predecease them or declare bankruptcy, the surviving spouse still retains occupancy and their share in the property is fully protected. Upon Mrs Marr’s death, the half share of the property is transferred to her two children, even if Mrs Marr has used all her assets to pay for care.

Four Oaks Legal Services can assist if you feel a Property Trust Will might suit your circumstances.  Please contact us on 01543 440 308.

 

Should You Give Your Property to your Children?

One of the frequent questions I get asked as a Solicitor is whether a parent should give their home to their children. My clients have many reasons in mind as to why they might want to do this from ensuring the house passes to the children to attempting to avoid paying for care  or just getting the children to take over responsibility for the property so they don’t have to worry about maintenance issues any longer.

Providing you have no mortgage on your property, you are at liberty to gift your home to your family if you want to do so. But there are a few issues you may need to bear in mind before making that decision:

You will no longer be the legal owner of your home

If you gift your home, you need to consider the possibility that your child may divorce. If this happens, they may be forced to sell your home as part of those proceedings. Equally, your son or daughter’s ex-spouse would have a legal claim against their estate, which would also include your home.

If your child has financial problems and had an issue with bankruptcy, your home would form part of their estate. This could then potentially be claimed by creditors seeking to claw back money from their estate.

If your child predeceases you, their beneficiaries would then become the owner of your home.

If you wanted to obtain equity release on the property, you would be unable to.

If you needed to release some equity from your home, perhaps to help pay for adaptions if your health needs changed, you would not be able to do this. As you wouldn’t own the property, you can’t take equity release on it.

You need to consider Inheritance Tax

You may think that if you transfer your home to your children, then it won’t form part of your estate for inheritance tax purposes should you survive 7 years after making the gift. Unfortunately that is not the case. Due to the reservation of benefit rules, if you “give” away an asset that you continue to use, it is still treated as part of your estate for inheritance tax purposes. By gifting your property to you children during your lifetime, you could also lose the new residential nil rate band allowance as well.

You need to consider Capital Gains Tax

Before gifting your property, you also need to think about other tax, such as capital gains tax. This applies where a property is not a “principal primary residence” and could apply if, for example, your child is not living in your home when it is transferred into their name but has increased in value when they come to sell it.

Will I avoid care home fees?

You need to tread carefully before passing your home onto your children for this reason. The Local Authority could view this as “deliberate deprivation of assets” to avoid having to pay residential care home fees.

Put simply, transferring your home to your children in this way may be seen as an attempt to conceal funds to avoid paying for care.

If this is deemed to be the case, the Local Authority can reverse the transfer of ownership back to you or they can include the value of the home in your financial calculation anyway but including it as “notional capital”.

So gifting your home involves a number of considerations and a decision to do this should not be taken lightly. I would recommend seeking advice from a specialist Solicitor about these issues beforehand.

Rebecca Head is a private client Solicitor with many years experience and can be contacted on 01543 440 308.

Are you due a Refund for Lasting Power of Attorney Fees?

 

We reported back in July 2017 that the Office of the Public Guardian would be making partial refunds to people who had paid to register their Lasting Powers of Attorney between the 1st April 2013 and the 31st March 2017.  This was due to the Office of the Public Guardian making savings on their operating costs which weren’t passed onto the public at that time.shutterstock_119205097

The Office of the Public Guardian have now announced that either the donor of the power or their appointed attorney can make the application for a refund.  Full details can be found on the Government website https://www.gov.uk/power-of-attorney-refund but applications can be made online  or by telephoning the Office of the Public Guardian on 0300 456 0300 (choose option 6).

 

What Might I Be Entitled To?

How much you get will depend on when you paid the fee.  You will also be entitled to 0.5% interest on the sum due.

When you paid the fee Refund for each power of attorney
April to September 2013 £54
October 2013 to March 2014 £34
April 2014 to March 2015 £37
April 2015 to March 2016 £38
April 2016 to March 2017 £45

You’ll be entitled to half the refund if you paid a reduced fee.

The Office of the Public Guardian has estimated there will be some £89 million pounds to be refunded, so they are estimating it will take up to 12 weeks to process the refunds.

Finally, if the donor of the power has since passed away, a refund can still be claimed.

For further information, please contact us on 01543 440 308.

 

Why Making a Will is Tough for Parents of Children with Disabilities

Statistically speaking, some 60% of the population haven’t made a Will. Of the 40% that have, around 20% of those need to review those provisions. Scary, isn’t it?

For parents with children who have disabilities, there are no specific statistics on how many of them haven’t made a will but in my 14 years’ experience as a wills Solicitor, I would guess it it will be an even higher percentage than 60%.

Over the years, I’ve given numerous talks on behalf of Mencap and other organisations, such as schools and charities, who support the parents of children with disabilities. I’ve talked about the issues which surround making a will when you have a child with disabilities and I’ve made many wills for parents in this situation, ranging from children with very mild to moderate disabilities to those who have very severe disabilities. In talking to many of these parents over the years, I’ve gained an insight into why many don’t act to make wills. In order to help other parents who may be in a similar situation, I thought I’d share those reasons with you, together with my responses.

Top Reason – the Ostrich Approach

No-one likes to think of a time when they won’t be here for their children but for parents of children with disabilities, this can be even harder to think about. For most of us, when our children are adults in the eyes of the law, they can take care of themselves and whilst we may not be around, they will manage. For those parents of children with disabilities, especially those with severe disabilities, it can be a real worry to think about who will care for your child as they may never be in a position to care for themselves. This tends to mean that parents just don’t think about it as it’s too upsetting for them to do so. They take the ostrich approach of sticking their head in the sand and no planning gets done.

Answer: Whether you make plans or you don’t, the inevitable will happen. It is surely better to have a will in place setting out your plans for your child, so that you can rest easy in the knowledge you’ve taken care of everything that you possibly can for them.

Second Reason – my child doesn’t understand the value of money

We all want to pass on our hard-earned money to our children and give them as much of a head start as possible but, when you have a child with a disability, it may not be as simple as that. If your child does not understand the value of money, this can be a huge problem as it may not be appropriate to leave them a large inheritance that they will not be able to manage. They may have no, or limited, skills to manage the funds or they may use it inappropriately.  There is also the risk that they may become susceptible to third parties who may want to relieve them of your hard earned money.

Answer: Trusts can be used to help provide for children who cannot manage funds themselves.

Third reason – my child will lose their benefits, there’s no point me giving them anything

Some children with disabilities may be reliant in the long term on means tested benefits. Therefore if they inherit money, they will have to declare this to the DWP and they may then lose those benefits. Many parents feel that they are giving with one hand and the DWP are then taking it away with the other hand. Some parents, therefore choose not to do anything as they can’t see the point in leaving anything to their child in this situation.

Answer: Certain types of trust can be used to help provide for children who are in receipt of means tested benefits. The funds are owned by the trust and not the child, so their benefits are not affected, even though the trust funds can be used for the child.

Fourth reason – I just don’t know where to start thinking about this

Many parents of children with disabilities feel overwhelmed at the thought of making a will because they don’t know where to start or how they will resolve the issues in making appropriate provision for their child. So instead of seeking advice, they do nothing.

Answer: a good friend once said to me “You don’t know what you don’t know”, which is some of the best advice I’ve ever been given. How can you expect to make decisions about your child’s future if you don’t know what the law allows you to do and what options are open to you. Of course, you will feel confused and unsure. If my car makes a strange noise, I don’t lift the car bonnet and look at it thinking “How can I fix this? I don’t know how to do it!”. I call the local garage and have experts look at it and tell me what my options are. It’s really the same with making a will. Have a chat about your situation with someone who specialises in preparing wills for families like yours and they will give you the options that are open to you. Once you know the options, it’s generally very easy to make a decision.

If you are a parent of a child with a disability, or you know someone who is, and you haven’t made a will, I can help. I offer an initial no obligation, no charge meeting to discuss your situation and to advise you about the options available to you, to help you make decisions so that you can begin the journey to properly protect your child and family.

Rebecca Head of Four Oaks Legal Services
Rebecca Head of Four Oaks Legal Services

 

Rebecca Head is a Solicitor and Director of Four Oaks Legal Services and can be contacted on 01543 440 308.

Rebecca Head Defends Lasting Powers of Attorney

Rebecca Head has defended lasting powers of attorney after comments from a former senior judge that powers of attorney may leave elderly people open to abuse

lasting-powerRebecca is a member of the national group, Solicitors for the Elderly which says with the right advice, powers of attorney can act as important safeguards

If you’ve ever made or considered making a Lasting Power of Attorney (LPA) the comments of a former Senior Judge of the Court of Protection, Denzil Lush, may have caught your attention last week.

https://www.bbc.co.uk/news/uk-40887323

A LPA is a powerful legal document that allows a person to appoint trusted individuals to make important decisions about care and finances on their behalf, in the event of a loss of mental capacity through an accident or illness such as dementia.

In the foreword to a new book on the subject, Mr Lush raised concerns about the “lack of transparency” in how appointed attorneys manage older people’s finances. The former judge went on to criticise the Ministry of Justice as being “disingenuous” in its promotion of the legal document.

However, Rebecca said LPAs are effective safeguards when created responsibly:

“Senior Judge Lush’s comments have given rise to fears that LPAs are a direct avenue for financial abuse. However, his comments must be put into context, as his 20-year career at the Court of Protection will have presented him with the very worst cases of financial abuse.

“An LPA can be a positive and effective legal tool, which ensures your wishes are respected should you ever lose capacity. Senior Judge Lush’s comments should highlight the clear need for professional advice when considering powerful legal documents of this nature.”

If you would like to talk to Rebecca about LPAs and if they are right for you, please call her on 01543 440 308

LPA Overcharged Fees to be Refunded

It was announced on 20th July that the Office of the Public Guardian (OPG) will be refunding some £89 million in “excessive” Power of Attorney registration fees for applications dating back as far as 2013.

On 1st April 2017, the OPG reduced the registration fee to £82 from £110.  They claimed that an increase in the number of applications, together with greater efficiency in processing applications, meant  a lower fee could now be charged.  Government agencies are not permitted to run at a profit without legislative authority.  During a recent review, the Ministry of Justice stated that the earlier fees charged meant that the OPG were running at a profit and these additional fees were not permitted.  Those additional fees are to be refunded.

The OPG will shortly announce how it plans to administer the refunds to individuals who registered a Lasting Power of Attorney between 2013 and 31st March 2017.  We will update you as and when we have further information.shutterstock_104156891