Most legal articles about Wills and Lasting Powers of Attorney (LPAs) cover off topics such as “why you should have a Will” and “the benefits of an LPA”. But few discuss a dilemma which affects thousands of parents across England and Wales, namely, how to plan for the care of a disabled son or daugther following your death.
Recently, a news item on Radio 4 discussed the link between Down’s Syndrome and early onset dementia, which may lead to Alzheimer’s disease. Those living with Down’s Syndrome are often now living well into their 60s, but with this increase in life expectancy comes the risk of dementia.
Although many people with Down’s Syndrome live independent lives, like anyone who develops dementia or Alzheimer’s disease, ongoing care and support will be required as the disease progresses. For parents of those with Down’s Syndrome or other disabilities, drafting an LPA and making adequate provisions in your Will for care can make a significant difference to your son or daughter’s quality of life, should they develop early on-set dementia or require care after you pass away.
What is a Lasting Power of Attorney?
A Lasting Power of Attorney (LPA) is a legal instrument that allows a person (known as a Donor) to appoint someone they know and trust, referred to as an ‘Attorney,’ to manage their financial, health and welfare affairs if they become unable to do so because they lack the necessary mental capacity.
Two Types of LPAs
There are two types of LPAs – a financial & property LPA and a health & welfare LPA.
Under a financial and property LPA, the power to manage financial affairs is assigned. These include:
- Organising bills and paying creditors
- selling or renting out the Donor’s residential home
- collecting and managing pension monies
- managing investments, properties, and business matters
A health & welfare LPA provides the ability for an Attorney to look after the personal care and health choices of the donor. They can decide for example, on:
- living arrangements and whether the Donor should move into a care home
- the collection and administering of medication
- the types of diet and recreational activities the Donor will participate in
- accepting or refusing life-sustaining treatment on the Donor’s behalf
A donor can elect to have one or both types of LPA, and the extent of the Attorney’s powers is entirely up to them. Different Attorneys can be used for each type of LPA.
The advantage of an LPA lies in that it provides a person with the ability to take control of who will make decisions for them when they lack the mental capacity to do so. Because of the increased chances of a person with Downs Syndrome developing dementia, it is crucial they can set down their wishes for care, both regarding their health and finances, while they have full mental capacity.
Making provisions in your Will for disabled children or children with learning disabilities
When making provisions for children who are disabled or who have learning disabilities, you may wish to consider setting up a discretionary Trust via your Will.
The advantage of a discretionary Trust is the share of your Estate you wish to pass onto your disabled child is placed in the hands of a Trustee. The Trustee has the absolute discretion as to how and when to allocate capital and income to your son or daughter.
Setting up a discretionary Trust in your Will allows you to provide for your child without affecting any means-tested benefits they may be entitled to. You can also provide for any other children or grandchildren within the discretionary Trust.
There are likely to be income tax and capital gains tax consequences depending upon how the capital is invested and used. However, the flexibility and advantages of the scheme should outweigh any tax liability that may occur during the administration of the Trust.
Choosing a Trustee or Attorney
The choice of a Trustee or, in the case of an LPA, an Attorney should be taken very seriously. Both Trustees and Attorneys have legal obligations to act in the best interests of the Donor or, in the case of a Trust, beneficiary. Several different Trustees and Attorneys can be appointed. In the case of a discretionary trust, you may wish to appoint a professional, such as an accountant or solicitor as a Trustee, along with a family member or close friend. This is due to the tax implications associated with a Trust.
LPAs and discretionary Trusts are powerful tools in helping families provide and care for disabled children or children with learning disabilities. As parents, worrying about our children begins at conception and never ends, even when they are adults (in some cases, it increases). Knowing you have put in place an LPA and discretionary Trust to ensure your disabled child’s welfare is managed by someone they trust and will respect their wishes after you have gone, can provide great peace of mind.
Rosie Bracher are specialist family law and private client solicitors based in Barnstaple. We have the knowledge and expertise to advise you on all matters involving Wills, probate and LPAs. Please contact our office on 01271 314 904 and arrange to speak to one of our team.