Finding financial wellbeing when… you’re in charge of someone else’s money

by | Apr 1, 2021 | Articles, Wellbeing

By Laura Gavin

I helped my 82-year-old dad set up a Lasting Power of Attorney (LPA) two years ago; in 2020 we needed it in more ways than I ever imagined.

When making an LPA was first suggested to me by a family friend, I didn’t immediately act on it. Dad was past eighty, sure, but he still had all his faculties. He was still joining in with U3A groups every week, going to the cinema and the pub with his friends. He was fine, wasn’t he?

It was also an intimidating conversation to have with a parent. To suggest to him that we might need a provision for him losing his marbles felt like I was saying he already had done.

But that isn’t what an LPA is. In order to make one in the first place, the person must have mental capacity. The whole point is to apply for it before you need it. If you wait until someone is incapacitated, or their health changes without warning, it can involve a long, costly and stressful court process to be able to make decisions about their welfare or finances.

So when I finally did pluck up the courage to have that conversation, that was how I framed it for my dad. Insurance for the future. As a man with a lifelong habit of meticulous book-keeping, those were terms he could get on board with.

The burden of trust

It can take eight to twelve weeks to arrange and register a LPA. It’s worth mentioning that there are two types of LPA—financial, and health and welfare—and we did arrange them at the same time, though this article is focused on the financial LPA.

You can draw up the documents yourself but for my dad and I, it was worth the legal expenses to have a record of it kept at his solicitors, to make sure it was all carried out properly and to have the opportunity to ask any questions. And boy, did I have questions. How was someone’s mental capacity determined? Whose decision was it to let me take over Dad’s accounts when the time came? What was to stop me just taking out a wad of his cash from the ATM?

What it essentially boiled down to was trust. An LPA is a legal document that means you can act on that person’s behalf. So while they have mental capacity to do so, a person chooses someone they can trust.

It’s quite a privilege really, to have that much trust placed upon you, but if I’m honest, it felt like a frightening burden sometimes as well. I was 35, and I still felt oddly like a child myself, given inexplicable responsibility over my dad’s finances. It became one of many uncomfortable role-reversals that happen as your parents reach old age.

Safeguarding

There are plenty of safeguards in the LPA that mean no one simply ‘takes over’. Only the person themselves can give instructions to make a Power of Attorney; I couldn’t have done it for my dad without his consent (though this is another reason it’s better to do it with a solicitor as witness and facilitator).

The wording of the LPA itself is based on the principles of the Mental Health Capacity Act (2005) and when you (‘the attorney’) and the person you’re acting for (‘the donor’) sign the document, these core principles are what you’re signing up to. Anyone can report concerns about attorneys to the Office of the Public Guardian (the government body which registers LPAs), if they think they are not acting in the person’s best interests.

There are also options at every stage of the application form. For example, the person can choose whether their attorney gains control over decision-making only when they lose mental capacity. The other option is to enable attorneys to make decisions as soon as the document is registered, so they can help the person out if they can’t get to the bank, for example. Importantly for this option, the donor must always give the attorney their consent, while they still hold capacity.

Most people choose this for practical reasons, and I am really glad that we did. As I came to understand last year, capacity doesn’t vanish overnight.

Being a responsible ‘bank manager’

Fast-forward to spring 2020, and a global pandemic was upon us. Dad was told he couldn’t leave home. Suddenly everything he needed outside of the house, I needed to get for him. Months later, it became clear that his memory and cognition were also starting to deteriorate.

He was painfully aware of this, and it added to a list of health problems brought on or exacerbated by lockdown. He asked me for more help with his finances.

In reality, this just involved me gradually chipping in with more support wherever and whenever Dad needed it. I took the LPA paperwork into his bank(s), acquired a debit card for Dad’s accounts in my name (‘think of it like a joint account’, the bank staff told me) and at his request, closed some bonds into another account.

That was the approach – supporting him to do things, rather than doing things for him. I was his right-hand woman, and the ultimate decision was still his. We’d discuss what he wanted, I’d bring back the statements, reiterate where the money had moved to, and ensure all the paperwork was still kept in his leviathon filing cabinet.

We have had to make a lot of adjustments over the last year. My sister and I were suddenly getting quotes for stairlifts and having to plan for future care costs, things that weren’t even on the radar 12 months before. I had to ask my dad how much money he had and where I could find it. It made me feel like some kind of nefarious money-grabber, waiting in the wings to get my hands on his savings.

But because we’d already had that first, difficult conversation years ago, the agreement and that trust was already in place, and it made everything we went through last year just that little bit easier.

This article is for the purposes of general awareness only, and does not constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.

Sources https://www.citizensadvice.org.uk/family/looking-after-people/managing-affairs-for-someone-else/ https://www.gov.uk/become-deputy https://fsmsolicitors.co.uk/5-differences-between-an-lpa-and-a-deputyship/ https://www.legislation.gov.uk/ukpga/2005/9/part/1/crossheading/lasting-powers-of-attorney