The only two inevitabilities in life are death and taxes, said Benjamin Franklin, one of the founding fathers of America.
Precisely because death and taxes have always been with us people make wills, not just to ensure their estates are divided as they would wish but, increasingly, to try and negate some of the effects of inheritance tax. Thanks to expanding property values (especially in hot spots like Edinburgh) and, to some extent popular savings schemes like ISAs, folks who may never have considered themselves wealthy now face the prospect of their estates becoming subject to the tax.
While dementia is not a certainty it is estimated almost 7700 people in Edinburgh are affected by the condition and this figure is expected to double over the next two decades.
Those affected across Scotland are estimated to number 100,000. One in three people over the age of 85 are likely to be affected; rising to one in two for those over 90 years old. While this, of course, means many others are unlikely to be affected it remains advisable to grant power of attorney – the process by which you nominate someone to look after your financial and health care issues should you become incapable, mentally or physically, to do so.
As if to emphasise this point, recent research into Alzheimer’s disease led by scientists at King’s College, London, with Proteome Sciences, a UK company, has led to a test that can predict the onset of Alzheimer’s in the next 12 months in people with memory loss with an accuracy of 87 per cent.
Up to now, a number of older people who have granted power of attorney are already in the very early stage of dementia, while others have no symptoms or no way of knowing if they will ever get it; they simply see power of attorney as a form of insurance to make certain that their affairs will continue to be looked after should dementia take root at some later stage.
Now, should a test for future dementia with a near-90 per cent degree of accuracy become licensed, and roughly one in three of those tested prove positive, then it seems inevitable that a sharp rise in interest in granting power of attorney will follow.
So what does it involve?
Basically, the “granter” authorises another person (or persons) to help them out and take responsibility for their welfare and financial affairs in the event of mental or physical incapacity taking hold. The appointment can take effect immediately or at a later stage that the granter decides when authorising the power of attorney.
As part of the process a lawyer needs to interview the granter in person and correspond with his/her potential attorney/attorneys (often close relatives or professional advisors). Most of the people being given power of attorney are responsible and ethical but very occasionally concerns rise about the motives of a son or daughter who may seem just a wee bit too keen to take control of Mum or Dad’s bank account or savings portfolio. In signing off a power of attorney a lawyer needs to be satisfied not only that the granter understands the nature and extent of the power of attorney but also that there is no pressure on them from the proposed attorneys. If I have any concern regarding a granter’s capacity then I will secure a doctor’s certificate.
Otherwise, granting power of attorney is a relatively simple process. Fees do vary between law firms but it should be possible to secure a joint financial/welfare power of attorney for an individual person for less than £200 plus VAT, plus a £70 fee for registering it with the Office of the Public Guardian for Scotland, which governs powers of attorney north of the Border.
When someone who has not granted power of attorney becomes unable to manage his/her financial affairs, a “guardian” has to be appointed through the court. This process is very cumbersome, involving many legal technicalities and accounting difficulties. And once the issue is resolved the cost will be at least ten times the fee that would have been charged for granting power of attorney.
Although normally associated with the older generation, granting power of attorney is advisable for every adult. Indeed, some of my most distressing cases have involved young adults and family breadwinners in the prime of life who – perhaps because of a road accident or sudden illness – are suddenly not in a position to make decisions for themselves and have not granted power of attorney, leading to a long, stressful and expensive application through the court for their dependents.
The solution is to have power of attorney put in place before it is too late.
Laura McDowall is a partner in the Edinburgh office of Blackadders, which last year processed more powers of attorney than any single firm of solicitors in Scotland