POWER OF ATTORNEY – BEYOND THE MEANS OF MANY

At some point in your adult life you have to think of the last bit and prepare for it. When you die you will probably want to make sure that those you leave behind don’t see a pile of worry through their tear-filled eyes.

So you make a Will. It will need thought and possibly some guidance. A problem you may encounter is the matter of naming two people as your Executors and Trustees. You need two because if you name only one they will not be able to derive benefit from your estate. Supposing you are married and you want your partner to inherit what you own. Obviously you will want them to be your Executor and Trustee (that is to handle all the stuff that has to be done when someone dies such as obtaining Probate, dealing with bank accounts, the tax man and so on) but you need someone else, named in the Will, to see fair play and to assist. It can be hard. If you haven’t yet made a Will then start thinking about it now and trying to assess relatives and friends who might take on this duty. Perhaps see a lawyer (but first read on).

The central point of this post is, however, to consider what happens if, before you die, you become unable to see to your affairs. The usual practice to cover this unlikely occurrence has been to sign a document called ‘Enduring Power of Attorney’ where you named your Attorney, someone whom you would trust to act for you, if you become too ill to do anything for yourself. It was a simple two page document which the ‘Donor’ would sign and so would the Attorney who would be signing to confirm that they understood that they have a duty ‘to apply to the Court for the registration of this form under the Enduring Powers of Attorney Act 1985 when the donor is becoming or has become mentally incapable’. If there are two of you, married or otherwise, then the usual thing would be for each one to name the other as Attorney. The signatures would have to be witnessed. It was not a complicated matter and it did not cost a fortune when you paid the inevitable visit to a lawyer to draw up the documents for signature. In 2006 when my wife and I drew up new Wills and signed the Enduring Power of Attorney documents for us both I think our fees amounted to around £450 for the complete package – and that included VAT.

Things are different now and I am very surprised to learn recently that I didn’t know this. I have seen nothing in the papers. I’ve had no emails. Some two years or so ago the whole power of attorney business was changed – and the cost implications are disturbing.

The new system requires an individual to sign two documents called ‘Lasting Power of Attorney for health and welfare’and 'Lasting Power of Attorney – property and financial affairs’. I am guessing that the old system was open to abuse and the new one gives the donor more protection; that’s a good thing.

What’s not a good thing is the cost. Our lawyer is handling the writing of our two new Wills and the documents for the Lasting Power of Attorney. This is a local lawyer, not a flash-nasty London lawyer, and his fees are almost certainly par for this course. The Wills will cost us around £660 for the two.

Lawyers, by the way, quote their fees without adding VAT. So our lawyer told us that the fee for the Wills would be £550 plus VAT. Don’t ask me why they do it this way. Perhaps they think it will make their charges seem less. Yet, the humble restaurateur must, by law, include VAT in his menu prices. Why the difference? Dunno.

Our lawyer’s charge for handling the four Lasting Power of Attorney document will be £1,404 including VAT (I did the sums).

And then … and then … we shall have to pay the Office of the Public Guardian a fee of £130 for registering each document. No VAT is apparently chargeable.

So, my friends to take this relatively simple precaution – which, in truth, almost everybody, no matter how humble their station, should take will cost a couple £1,924.

I’ll say it again

ONE THOUSAND, NINE HUNDRED AND TWENTY FOUR POUNDS.

So, Wills plus what I’m sure they will be calling ‘LPA’s, will cost us £2584.

I won’t say it again. It just makes me feel ill. How can a couple of modest means afford this sort of money?

PS Powers of Attorney written and signed before the change are still valid and should remain so.