Over the years I have been advising clients to make sure as part of their financial planning to arrange a Power of Attorney with their legal representatives. Unfortunately, sometimes it can be too late as someone close to you starts to lose capacity for making financial decisions for themselves. Fortunately, there is a safety net provided by the Court of Protection.

If you do not have a Lasting Power of Attorney in place and you lose capacity, a trusted individual i.e. spouse or family member, would need to apply to the Court of Protection to make decisions on your behalf. This includes your health and welfare, financial and property matters.

If the loss of capacity is more permanent, the Court can give these powers to a trusted individual, known as a Deputy, to aid more timely decision making.

To become a Deputy, there are various fees that apply:

• application fee of £400 for financial and £800 including health
• one off deputy fee of £100
• annual supervision fee of £320
• a “Security bond” if appointed as a “property and affairs deputy”. This is a type of insurance that protects your finances. The annual premiums are calculated on the value of the estate. For example, on an estate valued at £500,000, the annual premium would be £1000.

The Office of the Public Guardian will advise when these fees become due.

All in all, this is an expensive and time-consuming burden for those that are caring for you at what will be an emotional time.

The alternative is to arrange a Lasting Powers of Attorney now. You then have control over who is appointed to handle your affairs and you eliminate the ongoing cost burden. Your solicitor will also advise you on any special arrangements needed depending upon your circumstances.

Next month I will be writing on Lasting Powers of Attorney and the issues that should be included in such a document.

Nigel Taylor Cert PFS, Dip FA

This information is provided strictly for general consideration only. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case. It does not constitute legal or tax advice and must not be treated as such. Richmond House Wealth Management does not offer legal advice. The Financial Conduct Authority does not regulate legal services.