For many "adult children" whose own kids are grown-ups now, Christmas is a time when we might spend more time with our parents in their own home, rather than them coming to us. That provides us with an opportunity to see how well they are coping with everyday life, living in their own home, rather than just how it looks on a flying visit.
There will always be the inevitable "could you just" job list that is presented as we walk through the door, but what about the rest of the house?
- Does it look as it should (or used to?)
- Is there food in the fridge beyond what you might eat together?
- How warm are the rooms (and the radiators?)
- Are there piles of items not quite put away yet?
- Or unopened envelopes / small heaps of bills?
It may not even be that blatant, so look out for subtle signs that your parents might need more help to live in their own home for longer. Ultimately, that might mean carer visits, but for now it's more about the practicalities. Shopping, washing, paperwork.
Many adult children may look and think, "Well we can fix this as required". However, that means they are not looking to future complications if one of their parents falls ill, is incapacitated, or just loses confidence in using tech - including their banking app.
Should that happen, it is so much easier for you to step in and help if you are a named attorney on their Lasting Power of Attorney documents for decisions about:
- Health and welfare
- Property and financial affairs
LPAS: when and if needed
Lasting Powers of Attorney (LPAs) allow any reliable person, including yourself as an adult child, to manage the affairs of the 'donor' if they become unable to do so themselves.
That is a very important point: if.
An LPA will only 'click in' when it is required and doesn't need to involve every aspect of the donor's life.
For example, you might need access to your parent’s bank accounts to pay bills if your mum has always done this, is recovering from surgery, and is too tired to do so for a few weeks after an operation.
The LPA can click in, and you and other attorneys can step in to help until your mum is up to the task again.
Jointly and severally
LPAs contain a very useful safeguard, in that attorneys can act jointly and severally. This simply means you can each take a decision separately (so one person does the banking) or together. When attorneys are only allowed to act jointly, all attorneys must agree on the decision, and that can be hard work, logistically or otherwise.
For more about who can act as an attorney, see our previous article.
Your estate planning and your parents' LPAs
So, why is this important for estate planning when it’s not your LPA? Apart from reducing the stress and strain on your aging parents, there is also a very practical reason around funding.
Even if your parents have plenty of money, if they are incapacitated and unable to access it, you may end up having to subsidise your parents. If that money has to come out of savings and investments, for example, you may need to add in safeguards that you will not lose out by lending them money or similar.
You therefore need an 'audit trail' mechanism to repay yourself in a way that looks after your estate planning. The LPAs ensure that decisions are shared, and so everyone is responsible. The government website makes these responsibilities very clear:
“After you start acting as an attorney, you must:
- follow any instructions the donor included in the LPA
- consider any preferences the donor included in the LPA
- help the donor make their own decisions as much as they can
- make any decisions in the donor's best interests
- respect their human and civil rights”
Keeping LPAs up to date
If your parents already have LPAs, that is excellent. However, do check that all the details on that LPA are current and up to date, including the contact details of attorneys, and if any named attorneys have died. Have you registered online to be able to use the LPA? (For more info, see the government site)
LPAs from Panthera Estate Planning
At Panthera Estate Planning, I offer LPAs for married couples and partners of any vintage! For more information:
DISCLAIMER: The information and opinions in this article are for informational purposes only. They do not constitute any form of financial or legal advice and should not be relied on or treated as a substitute for specific advice relevant to your individual circumstances. In places we may refer to external websites for further information, but we are not responsible for the content of any external Internet sites.