A Practical Example Of Why An LPA Is So Important

Did you know that less than 1% of adults in the UK have a Lasting Power of Attorney (LPA) in place?

Unfortunately, Derek Draper, husband to Good Morning Britain presenter, Kate Garraway, is not part of that 1% and their family is currently facing the consequences.

Many people are not aware of what an LPA is or the impact it can have in the unexpected circumstance of losing mental or physical capacity due to illness or an accident. Derek and Kate's story now puts the spotlight on this powerful legal document.

Unfortunately, 53-year-old Derek Draper, husband to Good Morning Britain presenter, Kate Garraway, currently faces this situation after contracting COVID-19 in March 2020. As Derek still battles the effects of the virus, Kate recently spoke out about her financial struggles as Derek has fallen ill without a Lasting Power of Attorney (LPA) in place. Before examining Derek’s situation, let’s take a closer look at what this means.

What is an LPA?

An LPA is a document that lets someone, the ‘Donor’, give one or more people, known as the ‘Attorney(s)’, the legal authority to make decisions on their behalf. This would apply if the Donor ever lacks the physical or mental capacity to do so themselves or they choose not to make decisions for themselves for another reason. According to the Office of the Public Guardian, less than 1% of the adult UK population has an LPA.

In England and Wales, there are two types of LPA:

  1. Health & welfare: This can include things related to one’s daily routine, medical care, decisions on moving to a care home or receiving life-sustaining treatments. This only applies when someone is unable to make their own decisions.
  2. Property & finances: This can include decisions related to managing one’s bank account(s), paying bills, benefits or pension payments or selling one’s home. This can apply as soon as it is registered, with the Donor’s permission.

To set up an LPA, you need to be at least 18 years old and have mental capacity (i.e. the ability to make your own decisions).

What happens without an LPA?

If someone loses mental or physical capacity, it's often a significant emotional and psychological burden on their family. However, if a loved one doesn’t have the legal authority to make decisions on their behalf, that burden intensifies.

For example, if someone has a joint bank account and they lose their mental capacity, a bank will likely freeze the account, blocking most transactions. They will only reinstate the account after the court has appointed someone, called a deputy, to handle financial responsibilities on the individual’s behalf. This can be a long and expensive process, during which no money can leave the account to take care of bills or other family expenses.

Similarly, if decisions need to be made about medical treatment without an LPA in place, a family loses their authority to make those health-related decisions.

LPAs and estate administration

An LPA can only be in effect while the Donor is alive. If the Donor passes away, the LPA is no longer in effect, meaning the Attorney(s) can no longer make decisions on behalf of the Donor nor control any assets. Upon death, the Will comes into effect and the Executor becomes responsible for administering the estate. If there is no Will, the rules of intestacy apply, and the appointed Administrator manages the estate.

The Attorney may or may not be the same person as the Executor, however, if there is no Will, the Attorney could apply to become the Administrator of the estate.

Putting it into perspective

As mentioned above, Derek Draper did not put an LPA in place before falling ill, which is putting his wife, Kate, in a tough situation as Derek’s name is on most of their assets. As we now know, without an LPA, no one can deal with Derek’s affairs during his incapacity, not even his wife.

“One of the practical problems – which a lot of people would’ve experienced if they’ve got the absence of someone in their life – like many things the car is entirely in Derek’s name, the insurance is in Derek’s name, a lot of our bank accounts.”
- Kate Garraway, wife of Derek Draper.

With an LPA in place, Kate would have been able to focus on caring for their two young children as well as dealing with the emotional difficulties of her husband being ill. Handling household finances and insurers would have been one less thing to worry about.

This is clearly not a situation anyone wants to be in, however, their story truly highlights the importance of an LPA to reduce the weight on your loved one’s shoulders, just in case.

Article by The Kings Court Trust

27 November 2020

The views expressed in this blog do not in any way constitute advice and are specific to the date noted. As time passes the facts can change and readers should consult their adviser for up to date advice on any matters covered within the blog. Invest Southwest offers an initial review, which is free of charge, however long it takes. From this we will be able to confirm how we can help and give you an opportunity to decide if you would like us to. Thereafter, we will provide you with detailed recommendations and exact costs. Please note that we promise not to levy any kind of fee unless we can demonstrate a benefit to you.

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