Receiving a diagnosis for early-stage Dementia or Alzheimer’s can be a very worrying time for you and your loved ones. For many, the focus becomes getting their affairs in order and thinking about the preparations to be made for the future.
We are often approached by Clients who believe that now they or someone they care about has a diagnosis, it is simply too late for them to put Estate Planning or Lasting Powers of Attorney in place.
A person who has been diagnosed with dementia is able to get a Lasting Power of Attorney in the vast majority of cases, and a diagnosis should never be seen as a barrier to putting this critical planning in place.
Watch our FAQ Video Will Dementia prevent me from getting a Lasting Power of Attorney?
Read on to find out more about Lasting Powers of Attorney for people with dementia…
What is a Lasting Power of Attorney?
A Lasting Power of Attorney (LPA) is a legal document and is currently one of the most important documents you could ever create, as it is the only way to ensure your health and assets can be managed how you would want them to be, should you lose physical or mental capacity during your lifetime.
There are two types of Lasting Power of Attorney: A Property and Financial Affairs LPA, and a Health and Welfare LPA.
A Property and Financial Affairs LPA allows elected Attorneys to deal with the financial aspects of the Donor’s Estate, whereas the Health and Welfare LPA allows your Attorneys to deal with your health and care decisions.
Download our free Guides about Powers of Attorney
Both types of Lasting Power of Attorney were introduced as part of the Mental Capacity Act, launched in October 2007. Prior to this, there was a product called an Enduring Power of Attorney (EPA).
If you have an EPA created before 1st October 2007, it is still valid. However, it only covers your financial affairs and not your health and wellbeing. There are many good reasons to change your Powers of Attorney from an EPA to LPAs, even though your EPA is still valid.
Read our Blog Article on Enduring Power of Attorney vs Lasting Power of Attorney to find out more!
Why is having a Health and Welfare LPA important?
Launched as part of the Mental Capacity Act in 2007, the Health and Welfare Lasting Power of Attorney is a powerful tool that recognised the changing needs of an ageing population.
It is an incredibly sad fact that every three minutes, one person develops dementia in the UK.
From the age of 18, we are treated by the law as adults. If you have an accident or illness that suddenly prevents you from having the mental capacity to make your own decisions, control does not automatically pass to your next of kin, as many people mistakenly believe.
Unless you have a Lasting Power of Attorney in place, your loved ones will not be able to act on your behalf and will potentially be prevented from carrying out your wishes about your care and medical care, such as life-sustaining treatment, or even to refuse treatment.
Should you need care, the local authority could decide which care home you go into, while taking control of your finances to help fund your care fees. Your spouse, partner or family will have no say in the matter, they cannot demand you are moved to a different care home if they are unhappy with the level of care you are receiving. All they can do is request a move.
Download our free guide on Health and Welfare Power of Attorney
Why is having a Property and Financial Affairs LPA so important?
A Property and Financial Affairs LPA allows elected Attorneys to deal with the property and financial aspects of your estate when you are no longer have the physical or mental capacity capable to undertake matters yourself.
This can include paying bills or collecting pensions but is equally as important for the bigger decisions, like selling property or paying care fees, maintaining and managing your investments and making sure you have enough money to provide for your needs during the rest of your life.
Without it, banks, financial institutions, and utility companies will not speak to your loved ones or allow them any information or control over your assets. Upon being notified that someone has lost mental capacity, many financial institutions will freeze your accounts until proof of the LPA and who the Attorneys are is registered with them.
You may have assumed that if you are married or in a civil partnership, and you lose the physical or mental capacity to make your own decisions, your spouse would automatically have the legal authority to deal with your bank accounts, pensions, and make decisions about your healthcare.
Unfortunately, without a signed and witnessed Power of Attorney, that has been registered with the Office of the Public Guardian in advance, this is simply not the case. Without an LPA, they won’t have the legal authority to do anything on your behalf.
Who can make a Lasting Power of Attorney?
Anyone over the age of 18 can have a Power of Attorney drafted. In fact, we always recommend that the earlier you do it, the better! None of us knows what is around the corner, and it is often not old age that forces us to rely upon our LPAs.
Accidents can happen at any age and render us unable to deal with our own affairs. While for most people with the late-onset variety of Alzheimer’s or Dementia, symptoms tend to first appear in their mid-60s, signs of early-onset Alzheimer’s and Dementia can begin from as early as a person’s mid-thirties.
The key principle when agreeing to have an LPA put in place, is that you have the mental capacity to do so.
This means that you have:
- The ability to communicate specific decisions at the time they need to be made
- The ability to make specific decisions at the time they need to be made
- The mental capacity to understand the decision you need to make, why you need to make it, and the likely outcome of your decision
Some people will be able to make decisions about some things but not others. For example, they may be able to decide what to choose from a menu in a pub, while unable to understand and arrange their car insurance. For others, their ability to make decisions can change from day to day.
It is important to remember that just because someone needs more time to understand or communicate about a topic, it doesn’t mean that they lack mental capacity. So, having Dementia or Alzheimer’s does not necessarily mean that someone is unable to make any decisions for themselves.
When someone is having difficulty communicating a decision, an attempt should always be made to overcome those difficulties and help the person decide for themselves.
What decisions can a Lasting Power of Attorney make?
A Lasting Power of Attorney (LPA) is a way of giving someone you trust, your attorney, the legal authority to make decisions on your behalf if you lose the mental capacity to do so in the future, or if you no longer want to make decisions for yourself.
At Redwood, we absolutely believe that appointing your nearest and dearest, be that family or friends, really is the best course of action in the vast majority of cases. We find the concerns and mistrust can be mitigated by including everyone in the conversations from the very outset, so everyone has clarity about a clients wishes and more importantly, their accountabilities for implementing those wishes when required.
Your LPA for Property and Financial Affairs can be used while you still have mental capacity or you can state that you only want it to come into force if you lose capacity. You may choose for example to have then collect your pension or look after your bank account.
An LPA for financial decisions can cover things such as:
- Buying and selling property
- Paying the mortgage
- Investing money
- Paying bills
- Arranging repairs to your property
You can restrict the types of decisions your attorney can make, or let them make all decisions on your behalf.
Your attorney must keep accounts and make sure their money is kept separate from yours. You can ask for regular details of how much is spent and how much money you have. These details can be sent to your solicitor or a family member if you lose mental capacity. This offers an extra layer of protection.
An LPA for health and care decisions can only be used once you have lost mental capacity. It is very important to ensure that your LPAs have been registered with the Office of the Public Guardian prior to losing mental capacity. There are currently six month waits for registration, during which time the LPA is not valid and cannot be used. There is an added risk that there was an error in its drafting and it is declared invalid. By then, the person whose LPA it is will no longer have the mental capacity to agree to a new one.
An LPA for health and care decisions can generally make decisions about things such as:
- Where you should live
- Your medical care
- What you should eat
- Who you should have contact with
- What kind of social activities you should take part in
You can also give special permission for your attorney to make decisions about life-saving treatment.
What happens if a person with dementia hasn’t made a Lasting Power of Attorney?
If you do not set up an LPA for your financial and health decisions, initially someone from the Court of Protection or Social Services may be appointed to make decisions on your behalf. Your loved ones will then need to apply to the Court of Protection for a Deputyship, to essentially grant the same powers as an LPA, after you have lost mental capacity.
This process can take up to a year, cost thousands in court fees and once granted there will continue to be a heavy amount of work, oversight and governance from the Court of Protection over the powers you have been given and the decisions you make on behalf of your loved one.
For these reasons, the cost and time saving alone make setting up your Lasting Powers of Attorney in advance an obvious choice. It is worth reiterating the importance of registering your LPAS with the Office of the Public Guardian as soon as they are drafted, to ensure they are valid at the point of need.
Is a person with dementia considered incompetent?
A dementia diagnosis doesn’t necessarily mean you’re unable to make important decisions at that point in time. But as symptoms of dementia get worse over time, you may no longer be able to make decisions about things like your finances, health or welfare. This is sometimes referred to as lacking mental capacity.
Can people with dementia change their wills?
A person with dementia can still make or change a will, provided you can show that you understand its effect. Unless your will is very simple, it’s advisable to consult someone who specialises in writing wills such as us here at Redwood.
What is legal capacity with dementia?
Dementia is a progressive condition that can affect a person’s ability to make decisions and to look after themselves. As dementia progresses, the person might need the help of their family and friends to make decisions about their health, their care, their finances and their living arrangements. Every case is different, and the only person who can declare if someone no longer has mental capacity is a health care professional.
Dementia and Alzheimers are diseases that have varying speeds and levels of impact on each and every person who has them. The onset is generally slow and in its early stages can appear almost non-existent for the vast majority. Medical advancement and early detection are making living with these diseases easier and helping to improve the quality of life.
However, it is important to recognise that they are degenerative diseases and a persons health and mental capacity is likely to deteriorate over time. An early diagnosis is always best supported by early planning for your health and welfare needs. Lasting Powers of Attorney play a critical role in this planning, and an early discussion with an estate planning expert is always recommended.
The important thing to remember is that you can in most cases get a Lasting Power of Attorney with Dementia provided you have not deteriorated to a point where you have been declared mentally incapacitated.