Solicitors for the Elderly published a report last week which it says shows the UK faces an ‘incapacity crisis’ triggered by an ageing population paired with a lack of planning for the future.
It found that, while 12.8 million people in the UK over the age of 65 are at risk of developing dementia, only 928,000 Health and Welfare lasting powers of attorney (LPA) are registered.
While 73% of the population is concerned about losing capacity, 36% of people have not prepared in any way for later life.
Buckle up
Kelly Greig, partner at Irwin Mitchell, says an LPA should be as ubiquitous as a seatbelt.
"An adviser has a duty to take action, they cannot ignore it if there is a lack of capacity"
LPAs give the appointee, the attorney, the ability to manage an individual’s affairs in the event of an accident or the latter stages of a disease like Alzheimer’s.
“Financial advisers have a duty to consider whether a client has the capacity to give instructions and if they don’t they have to refer to the court of protection or to an appointed attorney,” Greig told International Adviser.
“Advisers also have a duty make sure a power of attorney appointee isn’t acting inappropriately or in breach of their powers.
“Many people don’t have a power of attorney in place. The alternative, if they lose capacity, even temporarily, is to submit an application to the court of protection to appoint someone to act on your behalf, which can be long-winded and expensive.”
Professional assessment
Acting eccentrically or unwisely is not enough to demonstrate an individual’s lacks capacity, said Greig.
The key area to consider is whether the individual can weigh up the pros and cons of a decision – if they can’t do that, seek legal advice.
Their capacity will then be considered by a professional under the Mental Capacity Act.
If you or your client is drafting an LPA, Greig also advises considering if the appointed attorney is trustworthy and likely to be unconflicted if they are called upon.
An attorney should be someone ideally be a generation younger. A professional attorney can be considered if the affairs are complex.
