Households are being warned of the mistakes associated with filling in a government document that costs just £83 and allows you to set out what you want to happen to your money and property if you are mentally or physically incapcitated.
Simon Chalk, a financial expert, said he was having to help a brother and sister who were unable to help a parent who was no longer able to manage their finances.
The parent had set up a Lasting Power of Attorney (LPA). This is a document registered with the Office of the Public Guardian. It is also known as a living will, which can be used to help a person who is still alive but too unwell to pay their bills.
They are often considered to be better than a will because they can help family members look after loved ones.
The family member who sets up the LPA does not have to be permanently incapacitated and they can also be set up for younger people, for example if someone was in a coma after an accident then a LPA would be used to help with their fianances until they were recovered.
It costs £82 to register an LPA and they take about 10 weeks to be registered.
Chalk said the brother and sister found themselves locked out of their parent’s bank account because they had not ticked the right box when filling in their Last Power of Attorey.
He wrote: “The brother and sister held joint power, as opposed to the much more commonly found joint and several powers.”
Having several powers would mean the brother and sister could act on their own in an emergency but because their mother only set it up as joint they found themselves unable to help her.
Chalk said: “They are having a nightmare with their bank who will not enable online banking or even a debit card, insisting everything they do must be done together, forcing them to visit a branch.
“This is a practical difficulty for them, as they have weekly domiciliary care bills to settle, let alone mum’s household expenditure, and live several hours apart.
Chalk is now in talks with the bank who are acting correctly according to the legal terms of a POA and is now hoping the bank may be able to do something
He added that making a power of attorney was a complex financial decision and that people should seek legal advice before making one.
A Power of Attorney is a legal safeguard you can put in place to make sure that if you are incapacitated either through ill health or an accident, your wishes are respected and carried out.
A Lasting Power of Attorney (LPA) is sometimes referred to as a living will, although you can have a legal document called Advance Decision, can set out what happens with your medical treatment, if you want to refuse certain treatments for example.
You can register your LPA online and the cost is £82 per LPA. If you choose to take out both types of LPA then you pay £164, for each. There is a 50% discount if you are on an income of £12,000 a year or lower, and certain benefits may allow you to make an LPA for free.
All LPAs go through the Office of the Public Guardian and can take up to 20 weeks to be registered. It used to be longer but the Government streamlined the system to allow online registrations in 2020.
There is no legal requirement to make an LPA, but financial experts believe more people need to make them as the number of us needing complex care will rise over the next 20 years and it warned this increase would also come with increased dependency, dementia and comorbidity.
Setting up an LPA is associated with older age, but most legal experts recommend setting one up as soon as possible.