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When It’s Too Late To Choose: The Cost Of Not Having A Lasting Power Of Attorney
Planning for the future is a vital part of ensuring personal affairs are managed effectively if capacity is lost.
A Lasting Power of Attorney (LPA) is a legal document that allows an individual (the donor) to appoint a trusted individual (or individuals) to make decisions on their behalf should they become unable to do so.
Failing to put in place an LPA can lead to complex, time-consuming, and costly consequences.
Types of LPA
There are two types of LPA in England and Wales:
Property and Financial Affairs LPA
This covers decisions such as managing bank accounts, paying bills, and selling property.
Health and Welfare LPA
This relates to care needs, medical treatment, and life-sustaining decisions.
Both must be made whilst the donor has mental capacity and registered with the Office of the Public Guardian to be valid.
What does it mean to lose capacity?
Mental capacity refers to the ability to make a specific decision at the time the decision needs to be made. This includes understanding information relevant to decision making, retaining it long enough to weigh up options, and communicating a choice.
Capacity can be lost gradually, such as through dementia, or suddenly, due to a stroke or serious injury. Importantly, capacity can fluctuate, and it may be that an individual might lack capacity at a particular point in time but regain it later.
As well as time-specific, capacity is also decision-specific, and a person may lack the capacity to make one kind of decision, but retain capacity to make others.
Without the necessary capacity, you may be unable to manage your financial affairs, make decisions about your health and welfare, or even handle day-to-day matters.
Critically, once capacity is lost, it is too late to put an LPA in place.
What happens if you lose capacity without an LPA?
If you lose mental capacity and do not have an LPA in place, no one automatically has the legal authority to manage your property or finances, and only the healthcare professionals treating you will be able to make health or welfare decisions on your behalf, acting in what they believe to be your best interest. In this situation the Court of Protection must be involved, and someone (often a loved one) must apply for a deputyship order to act on your behalf. This process can be:
Lengthy
The application process typically takes 6-12 months, and potentially longer if contested or delayed. During this time, no one can legally manage your finances or make decisions, which can affect bill payments, care arrangements, or property sales.
Costly
Costs include application fees, legal fees, medical assessment costs, and ongoing annual fees for example. A deputyship is much more time consuming and costly compared to making an LPA.
Restrictive
A deputy’s powers, once granted, are limited, and they are subject to ongoing court oversight.
Stressful
Applying to the Court of Protection for a deputyship order is a process that can be slow, expensive, and emotionally taxing, especially if there is a disagreement over who should apply or how decisions should be made. The lack of clarity and legal authority can cause confusion, disputes among family members, and emotional distress at an already difficult time.
Why set up an LPA?
An LPA is a legal document that allows you to appoint one or more trusted individuals (your attorneys) to make decisions on your behalf if you lose capacity. Key benefits include:
Control
You choose who acts for you and you can set out clear instructions or preferences.
Speed and simplicity
Attorneys can either act immediately once the LPA is registered (Property and Financial Affairs LPA only), or once you’ve lost capacity.
Peace of mind
Having a valid LPA in place can avoid the cost, delay, and complexity of court proceedings.
Respect for your wishes
LPAs can be tailored to your wishes and ensures that future decisions made by your Attorneys reflect your values and preferences.
A vital safeguard for everyone
An LPA is a vital part of lifetime planning, just like a Will. Without it, your finances, health, and welfare decisions could fall into the hands of the Court rather than trusted individuals of your choosing.
To discuss your requirements and find out how we can help you, please get in touch.
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The Real Cost of Avoiding Difficult Conversations
This article was published in the May/June 2025 edition of London Business Matters.
In the evolving landscape of Employment Law, one of the most overlooked risk management tools remains having timely, honest and evidence-based conversations. Employers and their managers who shy away from addressing performance issues, interpersonal conflicts, or inappropriate behaviour may find themselves not only presiding over a dysfunctional workplace – but also facing costly employment tribunal claims.
At the heart of many legal disputes lies a missed opportunity: the chance to address an issue when it first emerged. Whether it’s concerns around an employee’s capability, conduct, or fit within a team, early intervention – when handled correctly – can defuse tension, provide clarity, and create a constructive path forward. Crucially, it can also demonstrate that an employer acted reasonably, a central test in many legal claims.
Delaying these conversations, often out of discomfort or fear of confrontation, can send the wrong message. Employees may feel blindsided by sudden disciplinary action or formal procedures, particularly if they were never made aware of concerns informally. This perceived unfairness can become the seed of future grievances, claims of discrimination, or unfair dismissal cases.
From a legal perspective, employers may be able to prove they have a fair reason for any formal legal action however, tribunals will also examine whether the employer followed a fair process, and the employee treated fairly and reasonably. Was there open communication? Was the employee given a chance to improve or respond? Early, documented conversations – rooted in professionalism rather than blame – can become vital evidence that the employer acted appropriately.
So why do managers avoid difficult conversations?
Having practised Law for over 25 years, I’ve supported countless businesses with costly tribunal claims many of which may have been avoided if managers had embraced having those initial difficult conversations.
Below are some of the most common reasons managers avoid difficult conversations:
- Fear of conflict or damaging relationships
- Not knowing where to start after they have let concerns slide
- Lack of time and capacity
- Fear of creating a legal claim
- A culture of blame creating a fear of finger pointing
Training managers in conversation frameworks, emotional intelligence techniques, and a working understanding of employment law principles is essential if they are to feel empowered to manage situations fairly and confidently. It is well worth the investment and may just save your business a costly tribunal claim further down the line.
If you would like to get in touch about our employment law offerings, please contact us via the form below.
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Yesterday’s Losses, Tomorrow’s Gains
The 2024/25 tax year has just come to a close, which means the window is now open to submit that year’s tax returns.
If you have been investing in cryptoassets, you need to think carefully about whether you have a tax liability, and whether you need to submit a tax return. Now would be a good time to review our previous guidance on cryptoasset taxation.
Hopefully you have some big gains to report. However, sometimes you win, and sometimes you lose. Not every year is necessarily going to be a success: sometimes you may find that your losses in a tax year outweigh your gains.
While no-one enjoys losses, there is one silver lining, as you can carry them forward to future years. This means that when (hopefully) you make gains in the future, you will be able to offset these losses, and so reduce your Capital Gains Tax bill.
However, there is a catch, as you can only make use of losses that you have reported to HMRC within four years of the end of the tax year in which they arose. If you fail to tell HMRC about them within this period, then they are simply wasted.
You can of course report losses within a tax return, but if you are not required to submit a tax return for the relevant tax year, you can still simply write to HMRC to claim the losses. They will then be available to carry forward indefinitely until you have capital gains to offset them against.
For example, after a bad year of cryptoasset investments you might find yourself with net losses of £100,000. Then, in a future year, you might end up with net gains of £200,000. Provided you remembered to claim the losses in time, you can offset the loss, which (at a top Capital Gains Tax rate of 24%) will save you £24,000 in tax.
It’s not just your actual losses that can be claimed. If you have tokens that have become worthless, or if you have lost one of your keys, you may be able to put in a negligible value claim, which generates a loss as though you had sold the token for a nil value.
The cryptoasset experts in the Private Wealth & Tax team at Quastels can help with these issues. They are able to calculate your income and gains (or losses) and can assist in reporting this to HMRC. They can also provide advice on tax and estate planning with cryptoassets, as well as advising on the law regarding digital assets and digital estate planning generally.
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