Lasting Powers of Attorney
A ‘lasting power of attorney’ (LPA) is a document which gives an ‘attorney’ (your representative) legal authority to make decisions on your behalf (you the ‘donor’). Crucially, the power continues after you lose the mental capacity to make decisions for yourself.
An LPA may be established for many reasons, for example, it may be to look after specific aspects of your financial affairs or to make decisions about your health and welfare should you lose the capacity to do so.
There are 2 types of LPA, one for property and financial affairs and one for health and welfare. You can make one or both. LPAs replaced the previous system of enduring powers of attorney, however, enduring powers of attorney created before October 2007 are still valid.
Each LPA must be registered with the Office of the Public Guardian (OPG), at a cost of £82 each, before they can be used (unless you qualify for a fee exemption). It can take up to 3 months for the LPA to be registered and become valid.
The key difference between the 2 types of LPA is that a property and financial affairs LPA can be used while someone still has capacity, for example while they are on holiday or living abroad, whereas a health and welfare LPA can only be used when mental capacity has been lost.
Usually no more than 2 or 3 primary attorneys are appointed; they may be family members, friends or professionals known to you. Attorneys must be over 18, have mental capacity to make decisions, not be bankrupt nor be subject to a debt relief order. Replacement attorneys may also be appointed in case any of the primary attorneys cannot act.
Attorneys can be appointed to act jointly (i.e. must make decisions together) or jointly and severally (i.e. can act together or individually). If required, attorneys can be appointed to act jointly for some decisions and jointly and severally for others although care must be taken to ensure the document is very clear about what can and can’t be done in either case as the OPG may refuse a document on the grounds that it is uncertain.
You can give your attorneys instructions as to what they can and cannot do or preferences as to how you would like the attorneys to deal with matters. Instructions are binding on the attorneys whereas preferences, as the name implies, is just for the attorneys to take into account when making their decisions.
Each LPA must be certified by a ‘certificate provider’. The certificate provider is essentially an independent witness that the LPA is being signed without duress and that the donor has the mental capacity to enter into the document. This can be a professional person or any person who has known the client for 2 years (provided they are not an attorney).
So why an LPA
Without an LPA in place it may take up to 6 – 9 months for your relatives to apply to the court to act on your behalf in financial or personal and healthcare matters. This is a costly process and there is no guarantee that the court will appoint the individual you would have wanted to appoint to look after their affairs.
Without an LPA decision the following can be made by others who may not know you:
- where you live
- what medical treatment you receive
- what you eat
- who you have contact with
- the buying and selling of property and running your bank accounts and investments.
According to the Alzheimer’s Society, by 2025 more than 1 million people in the UK will have dementia. Therefore, it is prudent to plan ahead. Furthermore, it is not just a consideration for the elderly; younger people may also become incapacitated through accident or illness.
LPAs are designed to be recognised by financial institutions, care homes and local authorities, tax, benefits and pension authorities thereby making the handling of financial and welfare affairs much easier for relatives when it is needed.
It must be remembered that an LPA is a serious, powerful legal document and it can be complicated to draft it correctly. It is possible for you to draft your own LPA without a solicitor but apart from complexity OPG may object to certain restrictions contained in the LPA and may even render the LPA invalid due to technical mistakes made filling in the forms.
If you want more information, please contact us.
Why make a Lasting Power of Attorney?
- Allows your affairs to be managed by your own choice of Attorney
- Saves time and money (let alone worry & financial hardship)
- Prevents your loved-ones getting bogged down by red tape