Getting a joint account with children will not get around an LPA
As well as this individual, let’s call her Mrs Jones, and her son not being ready for an LPA, Mrs Jones’ concerns were around what would happen to her in the event of her untimely death. Her husband had passed away unexpectedly from a short illness and it was this which had prompted her into sorting out her own affairs. It also made her cautious about her son’s situation should she then also pass away unexpectedly - as she saw that an LPA would “die with her”.
Whilst this is true - and you can read more about it here from one of our recent blogs - it doesn't mean Mrs Jones should forgo the LPA altogether.
An LPA exists to protect an individual and allow a nominated person, or attorney, who can then act on an individual’s behalf if they become physically or mentally incapacitated, a financial LPA provides for both of these options to be included. The attorney is then able to step in and access bank accounts to pay bills, mortgage or rent and is also able to handle any assets or other financial affairs. There is also a Health and Welfare LPA, allowing the attorney to be involved in making welfare or medical treatment best interest decisions , acting on the incapacitated individual’s behalf.
That’s why Mrs Jones is correct, that if she nominates her son as attorney, she will still need to ensure her will is up to date because the will automatically takes over upon death, whereas an LPA is in place all the time a person is alive.
As to Mrs Jones’ and her son’s point of the joint bank account, I actually told Mrs Jones to avoid this as a viable alternative to the LPA.
Firstly, there is the issue of safeguarding and all the time complaints to the OPG are on the rise any joint assets or finances can be held under huge scrutiny.
Secondly, we recently reported how the banking industry had recently become a target for criminals looking to take advantage of vulnerable individuals. Without an LPA, accessing finances could become a major issue and the waters could be muddied should Mrs Jones become incapacitated and then a target for banking fraud.
Plus, if Mrs Jones was to go into a care home, there could be problems where funding is needed if her account is in joint names with her son. Plus there are all sorts of tax issues to take into consideration, what should happen if her son was to marry - or even divorce - whether there are any children or grandchildren. All of these circumstances affect any decisions made on Mrs Jones’s estate whilst she is alive, as well as the division of her estate when she passes away.
Therefore, my advice to her was to avoid opening a joint bank account and instead carefully re-consider making both a financial and welfare LPA appointing her son. As with any document of this kind, they are there to protect you and your loved ones if the worst should happen - otherwise, they are there ready to be used if needs be and help give peace of mind. What is essential of course however is that your trust who you are to appoint as your attorney. You should also think about including a replacement attorney just in case your chosen attorney is unable or unwilling to act art a later date.
All circumstances differ and the way forward is to always take advice. Talk to an independent financial adviser or us at Downs Solicitors as we will be able to help. Contact the Private Client team for more information.