One in three people over 65 will develop dementia and, every 90 seconds, someone in the UK is admitted to hospital with an acquired brain injury. But while an estimated 40% of the adult population has a will, less than 1% has a Lasting Power of Attorney. Three experts spell out why this needs addressing
Abraham Lincoln once said: “You cannot escape the responsibility of tomorrow by evading it today.”
Anyone who realises the benefits of dealing with what’s immediately in front of us, instead of endlessly fretting about getting it done, will agree. And preparing before an event takes place is even better.
That’s certainly something to consider if an individual is likely to lose mental capacity in future.
It’s a predicament that throws up many questions. Who will make business and financial decisions for them? And does the individual know enough about how a financial adviser makes decisions to allow them to take the reins?
This is where a Lasting Power of Attorney (LPA) comes into play. LPAs were introduced in the UK in 2007 as part of the Mental Capacity Act 2005.
They replaced the previous system of Enduring Power of Attorney that had been in place since 1986. In Jersey, however, LPAs were only introduced in 2018 as part of The Capacity and Self-Determination (Jersey) Law 2016.
And in Guernsey, residents have only been able to put LPAs in place since April 2022.
“LPAs are an excellent tool that enable islanders to take additional estate planning steps,” says Henry Wickham, Head of Estate Planning, Wills and Probate at Ogier.
“They allow the donor to exert more control over their future if it comes to a point where they can no longer express their choices and wishes due to incapacity of some form.
“In Jersey and Guernsey, LPAs enable a person to appoint someone else to make decisions on their behalf in respect of their property and affairs, and their health and welfare,” Wickham continues.
“Ultimately, they allow individuals to plan for their future and put in place arrangements to support them at a time when they may no longer have the capacity to make decisions for themselves.”
LPA in practice
Under an LPA, the ‘donor’ – the person behind the LPA – can provide their ‘attorney’ with concise instructions and preferences that outline their wishes.
An attorney must adhere to any instructions provided; the preferences are used as guidelines that the attorney should regard when making decisions.
Wickham offers some examples. “Instructions for an LPA for property and affairs might see me saying my attorney must always consult a financial adviser before investing more than £20,000, or that they must consult with my daughter or son before selling my property,” he explains.
“A preference, meanwhile, might see me saying that I’d like my attorney to donate the sum of £250 per year to an animal charity or invest in ethical funds.
“Meanwhile, instructions for an LPA for health and welfare might include me stating that my attorney must ensure that I am fed a vegetarian diet, or that they should not make the decision to put me into a care home unless it is the opinion of my doctor that I am no longer able to live at home.
“But a preference could be me saying that I’d like to continue to exercise in the form of yoga and swimming for as long as I am able to do so and as long as it is of benefit to me.
“Another example might be me stating my care home of choice should I need to reside in one at some point.”
Wickham also explains that, while LPAs in Jersey and Guernsey are very similar, there are minor differences in some of the terminology used. “In Jersey, the person who appoints their powers is known as a donor, but in Guernsey they are known as a grantor,” he says.
“There are no noticeable differences between Jersey and Guernsey LPAs and their UK counterpart,” he continues. “This is not surprising, as Jersey’s and Guernsey’s respective capacity laws, which provide the legal framework for the islands’ LPAs, were heavily influenced by the English Mental Capacity Act 2005.
However, it’s worth noting that UK LPAs can be registered in Jersey or Guernsey, and so take effect as a local Jersey or Guernsey LPA.”
“Anyone who has capacity and is over the age of 16 can do an LPA,” adds Ian Dyer, Associate Director (Care) at Law At Work.
“Most of us shouldn’t lose capacity – and if we do it would hopefully only be in the later stage of life. This is when we become more susceptible to conditions such as dementia or strokes.
“But you never know what’s going to happen. Life can be risky and, sadly, anyone can lose capacity at any time.
"So my advice would be for as many people as possible to write their LPAs, and to get them registered – because then the people making decisions on your behalf are the people you trusted to do it.”
“We see so many situations where someone should have put a plan in place,” says Victoria Grogan, Group Partner in the International Private Client and Trusts team at Collas Crill. “But now their capacity is waning and they’re no longer in a position to do so.”
Cautionary warning
So, what happens if you do lose capacity and don’t have an LPA?
“The Royal Court would appoint a delegate,” says Dyer. “If my wife were to lose capacity and if she didn’t have an LPA, I would probably apply to be the delegate for my wife.
"But I would need to demonstrate to the Royal Court that I was of good standing and such like. And, depending on the assets you have, the Royal Court could appoint a professional delegate from a law firm.”
Grogan adds: “When you’re working on these documents, it’s key to talk about your wishes to the person you’re appointing as your attorney. The health and welfare LPA in particular can bring up some tough subject matters – like your wishes around and views on resuscitation and life-sustaining treatment.
Dyer explains that people can stipulate substitute attorneys. “If I, for example, had my wife as my attorney for my health and welfare LPA, I might put my eldest son or daughter as my substitute attorney in case something happened to my wife and she either wasn’t around or didn’t have capacity herself to make decisions when I needed her to.”
Grogan concludes by stressing how easy LPAs are to enact, but that they are often forced exchanges that people would rather shy away from.
“Once you’ve done one, that’s it – you can forget about it. You’ve ticked that box. They don’t take much time and are fairly inexpensive.
“But perhaps there’s a bit of a taboo around them – we’re British after all, which means that these kinds of conversations don’t come naturally to us. But they shouldn’t feel awkward, either. We should be having these sorts of discussions – about our own wants and wishes – regularly.”