FINANCIAL AFFAIRS OF THE HEART!
With hits such as “toxic” and “criminal” we probably should not be surprised by the recent court case that has developed between Britney Spears and her father.
What is a Conservatorship?
Due to Britney’s troubled past and her vulnerability, her father was appointed to look after his daughter’s financial affairs and wellbeing by the Court under an arrangement known as Conservatorship. This arrangement has been in place now for some 13 years and whilst Britney may not have had the mental stability to make decisions for herself when the Conservatorship was put in place, it appears that her mental state has clearly improved and she now wants to take control back for all aspects of her life. This is the decision that the courts must consider and decide on.
Can you put a Conservatorship in Place in the UK?
The UK does not have an equivalent of a Conservatorship although a trust is sometimes used to manage the affairs of an individual who is vulnerable or perhaps does not have capacity to look after their own affairs.
A trust can be a very flexible arrangement to manage an individual’s financial affairs, offer protection against undue influence and potential tax savings. The individuals who manage the trust are known as the trustees although their powers can only be used to manage the financial assets held subject to a trust. The trustees’ powers do not extend to making decisions about the beneficiary’s health and welfare.
The Benefits of putting Lasting Powers of Attorney in Place
If you have capacity to make your own decisions, there may come a time when this is not the case. To safeguard against this, you can put legal documents in place known as lasting powers of attorney. There are two different types. The first is known as a property and affairs LPA (PAFLPA) and allows the people you appoint (known as your attorneys) to make decisions about your financial affairs such as paying bills or buying/selling property.
The other type of LPA is known as a Health & Welfare LPA (HWLPA) and allows your attorneys to make decisions on your behalf about your health (i.e., medical treatment) or your welfare (i.e., living accommodation, how you live day to day, etc).
Your PAFLPA and your HWLPA cannot be used until they have been registered with the Office of the Public Guardian. Your HWLPA cannot be used by your attorneys unless you have lost capacity. Whilst your PAFLPA can be used before you lose capacity you can include a restriction in the document itself which specifies that it cannot be used unless you have lost capacity. This ensures that you retain control over all financial and health and welfare decisions until you are unable to make the decisions for yourself. A crucial difference from the conservatorship that Britney Spears is subject to.
A recent survey has identified that at least 25% of the UK population will suffer some form of mental health issue during their lifetime. Therefore, it is crucial that you consider putting PAFLPA and HWLPAs in place before it is too late.
For further information on the use of trust and LPAs to protect you and your family please contact Malcolm Emery.