Robert Gout: LPAs ‘essential’ for Alzheimer’s clients

Robert Gout looks at Alzheimer's disease in relation to financial planning and highlights why setting up lasting power of attorney can be highly beneficial for clients

Alzheimer’s disease is a physical disease affecting the brain and is the most common cause of dementia. In its early stages, it can cause day-to-day memory loss but can progress to cause more severe problems with memory, communication, reasoning and orientation to the point where the sufferer requires continued care as they become far less aware of their surroundings.

More than half a million people in the UK now suffer with Alzheimer’s disease; it mainly affects those over 65 and the risk of developing the disease increases with age.

One in six people over 80 have dementia according to the Alzheimer’s Society, and this is likely to increase as people live longer, while there are also more than 40,000 people in the UK under the age of 65 with dementia.

While managing the long-term social and health impact of Alzheimer’s disease remains a focus for the victims and their families, the progression of Alzheimer’s disease can make planning and organising more difficult and so it is important to get your finances in order as early as possible. Maintaining independence may also become a problem and will usually require help in decision making from relatives and/or friends. While a frank conversation can sometimes be awkward and hard, sitting down with loved ones early upon diagnosis is best, as this can help make sure the right support is received. It is also important at this time to consider what state benefits or exemptions may be available, which will help reduce the financial impact.

World Alzheimer’s Day: 15 steps to protect client cash after dementia

As the disease progresses, more formalised authorities and legal assistance may be required as well as specialist long-term care planning (through an independent financial planner) and/or arranging a lasting power of attorney (LPA).

Independent financial planners that are experienced in later life planning can help and advise on nursing care financing and the options available. The place where the person with Alzheimer’s disease may be cared for is so important and it is a relief for all, knowing relatives are receiving the best treatment within an environment where they feel most relaxed and happy.

An LPA is a legal document which allows someone they trust to make decisions on their behalf at the time they lack the mental capacity to make decisions themselves.

What happens if I don’t get an LPA?

If your loved one has not organised an LPA and is unable to manage their affairs, relatives/friends need to apply to the Court of Protection and fill out an application for dutyship. Without this, one is in no position to freely manage the financial affairs and welfare needs of the person with Alzheimer’s disease, which includes securing benefits, arranging appropriate care, accessing pension payments, bank accounts and/or investments.

The Court of Protection application process is a lengthy one, often taking up to six months during which finances are frozen. While this is taking place, someone would be required to pay for care costs. There are also costly fees attached when applying to the Court of Protection – the application costs £385 with an annual supervision fee of around £320. In addition, new deputies are expected to pay a fee of £100.

Being cared for in a constant, stable and relaxed environment is vitally important for a person suffering with the more developed symptoms of Alzheimer’s disease. They require special care and understanding from loved ones who know them well and who can act in their best interests. It is therefore important to plan early to avoid every need for later life planning being under the decision of the Court of Protection.

Essential facts about LPAs

•         There are two different forms of LPA: one for property and financial affairs and the other for health and personal welfare

•         The two can be formed separately or together

•         You can have more than one attorney, and choose whether the attorneys must act together or whether they can also act independently

•         Conditions and restrictions can also be applied to the LPA in how and when it is used

•         It is therefore of great importance that legal advice is sought with regards to arranging a LPA that can be registered with the Office of the Public Guardian when it is needed

Robert Gout is Chartered independent wealth planner at WHIreland