Protecting your health, welfare, and finances: Our Guide to safeguarding your interests when you need extra support
There are a number of risks that can impact you if you do not have the right processes in place if you become incapacitated. This can affect how healthcare is delivered to you, by whom, and the outcomes. It can mean that your finances may not be handled in the say that you wish, and property and assets may be sold to fund your care. And your business interests may be impacted if you are a director or shareholder in a business.
Our Top Tip
Consider how you would like to be cared for if you are incapacitated. That could be at a young age, or in your older years. Would you be happy that your loved ones could make the right decisions for you, how could you ensure that they have the legal right to do so, and what could you do so that they understand what your wishes are. How could you prevent your local authority intervening when you don’t want them to. Our first tip is to take advice from a professional on how to achieve this.
Lasting Powers of Attorney
They are legally binding, and allow you to set out detailed instructions, appoint the people you want to be responsible for you, and protect you from interference.
Lasting Powers of Attorney are governed by the Office of the Public Guardian, and are subject to significant legislation and an arduous approval process to ensure that they are robust. Complaints are managed by the Court of Protection.
There are three LPAs: Health and Welfare, Finance and Property, and Business. All three work together to offer a complete package of protection.
Lasting Power of Attorney: Health and Welfare
At a time when you are unable to make decisions about your healthcare, having the right LPA in place means that your ‘attorneys’ are able to carry out your instructions. You may wish to continue living at home if you are elderly rather than being placed in a care home. Providing it is safe to do so, your wishes will be carried out. Not only by your attorneys, but medical professionals, social services and other statutory bodies are bound by your LPA.
There are cases where local authorities have stepped in to take over the care of a loved one where an LPA hasn’t been in place. You can read one example here .
A health and welfare LPA can include everything from where you live, who cares for you, and your wishes in the event that you need resuscitation.
Our Top Tip
Consider how you may want to be cared for, what your wishes would be for that care. For example, you may want to stay in your home for as long as possible. Think about how you can achieve that and who you would trust to carry out your wishes. Take some notes to get you started.
Lasting Power of Attorney: Finance and Property
One of the biggest threats that you will face if you require care is to your finances. If a local authority places you in a care home they will seek to dispose of your assets to fund your care. Not only that, but any joint assets like bank accounts may be frozen. That means that your spouse may not be able to access bank accounts to pay bills, buy groceries and so on. A Finance and Property LPA works in the same way as the Health and Welfare LPA. As part of the process you appoint your attorneys to take responsibility for your money and assets and manage them according to your wishes. These instructions are recorded in your LPA, and subject to stringent legal protections.
So this type of LPA ensures that your money is spent on your care. And with a Health and Welfare LPA in place, you have already defined what that care is. The added benefit here is that your assets will not be swallowed up by local authority care, so you can plan what to leave in your will as well.
Our Top Tip
Run through your finance and assets. Include your pension income in your calculations. If some investment were required to continue your care as you wish, is it reasonable and affordable? Keep some notes.
Lasting Power of Attorney:Business
The third LPA deals with your business interests. It is particularly useful as part of your business continuity planning. Each LPA is designed to speak for you when you are unable to. This LPA works in the same way, but also allows a business to continue operating.
If you are a business owner, or director in a company and you become incapacitated some vital business functions may be suspended. In particular, the ability of the business to make financial transactions could be affected. Are you a signatory to company bank accounts? Without you nothing can be signed.
The second serious issue is the contractual agreements your business may have with suppliers and clients. If you were the original signatory, any contract could become null and void. So not only could the operations of a business be impacted, but its ability to fulfill contractual responsibilities.
By including an LPA for key personel in your business continuity planning you can avoid these issues and your business can continue to operate. And depending on how your business is structured, you may still derive an income from it.
In practice, you appoint your preferred ‘attorneys’ in the same way as you would for other LPAs. These can be anyone, but people with a knowledge of business are advisable. They then carry out the wishes you have applied to your business to ensure continuity.
Our Top Tip
Businesses should have a continuity plan. Consider creating one for your business with your directors, and think about how your business will continue if you are unable to take part. Draw up a formal continuity plan that describes how it will deal with various scenarios.
This deals with how your children will be cared for in the event that something happens to you and their other parent. So it doesn’t deal with you, but you can put something in place to safeguard your children. This is something that is included in your will, and can instruct on who will care for your children, your wishes for their education, and so on.
This is a difficult area to contemplate, so our advice here is to consider how your children will be feeling should this be necessary, and what you can do now to try and reduce the impact of their parents’ death on them.
There are many different types of trust for a host of different purposes. In this case, a trust can be put in place to protect your assets for future generations. So if you do require care, your finances can be used effectively. It also means that should you have to go into local authority care, your assets will be protected.
Our advice on trusts is simple. They are complex and if not set up correctly open to challenge. So take professional advice.