Everyone should consider making a Lasting Powers of Attorney (LPA) as there could come a time in all of our lives when we need some assistance to manage our affairs. LPAs are commonly made by people who are retired or planning for Later Life but there are situations when they could be useful for an adult of any age.
What is an LPA?
An LPA is a legal document that enables you to give someone else the authority to act on your behalf in accordance with any instructions that you give to them or, if you lose capacity, make decisions on your behalf. There are 2 types of LPAs: financial and welfare.
Property and Financial LPAs
Property and Financial LPAs give authority to deal with anything financial that you can deal with yourself. This would include authority to manage your bank accounts or investments, to arrange payment of your bills or care fees, buy and sell property, make insurance arrangements or manage your income/benefits payments.
Health and Welfare LPAs
A Health and Welfare Lasting Power of Attorney enables you to give authority for someone else to make decisions regarding your health and care in the event that you are no longer able to make that decision for yourself. This might include decisions about the medical treatment that you receive, whether or not you should receive life sustaining treatment, where you live, what you eat, the types of activities that you take part and who you socialise with.
LPAs are important documents that give far reaching powers to other people. For that reason you should choose your attorneys and consider the terms of your LPAs carefully. A professional can discuss your options with you and tailor your LPA to suit your individual circumstances.
Choosing an Attorney
The decision of who to appoint is an important one. You can appoint any number of attorneys and replacement attorneys who will step in if your original attorneys cannot act for you. It is essential that you trust the people that you appoint and that you are confident that they will always act in your best interests. You can appoint family, friends or professionals to act on your behalf. You can grant full power to act or you can decide to limit powers or include safeguards or guidance for your attorneys in the Lasting Power of Attorney. When tailoring your LPA to suit your particular circumstances, it is important to ensure that the instructions in your LPA are both clear and legal. If there is any ambiguity then it is possible that the LPA may be difficult to use in the future or certain wishes may not be able to be followed.
To make a valid LPA, you will need someone to sign a certificate in the LPA to say that they have discussed the document with you, that they are satisfied that you understand the power that is given under the LPA and that you are not acting under any duress.
The certificate provider must have either known you for at least 2 years or be a qualified professional such as a Solicitor or GP. Rix & Kay can provide this certificate, unless you are appointing us as your attorneys, in which case we can help to find an independent person to complete the certificate.
Your certificate provider may be asked to give evidence in Court should there be a future dispute so you should choose your certificate provider carefully. If you are asked to complete a certificate for someone else’s LPA you should ensure that you are satisfied that they understand the LPA and it may be useful to make a detailed record of your discussion in case you are asked to give evidence at a later date.
Registering your Lasting Power of Attorney
Your LPA can only be used once it has been registered with the Office of the Public Guardian. Once you have signed your LPA and the certificate has been completed, it is then necessary for the LPA to be signed by all of your attorneys.
It is then for you and your attorneys to decide whether to register the LPA straight away or wait until such time as it is needed. Do however bear in mind that the registration of the LPA will take approximately 8 to 10 weeks, provided there are no mistakes in the application. We would therefore recommend that your LPA is registered as soon as it has been made so that it is available straight away in an emergency situation.
When you create your LPA you can nominate people who must be notified when the registration application takes place.
Enduring Powers of Attorney
An Enduring Power of Attorney (EPA) made before 1 October 2007 is still a valid document but will be limited to dealing with your property and finances. If you wish to give someone authority to make decisions about health and welfare matters then you will need to make a LPA for health and welfare.
Unlike LPAs, an EPA is valid and can be used before it is registered with the OPG. However, your attorney has a duty to register the EPA with the OPG if they have reason to believe that you have become or are becoming incapable of managing your finances. The registration process will take approximately 2 months during which time the attorney’s powers are limited.
What happens without a Lasting Power of Attorney?
If you lose capacity to manage your own affairs and there is no LPA or EPA in place, it will be necessary for someone to apply to the Court of Protection to ask to be appointed as your Deputy. This process is more expensive and time consuming. There is also the possibility that someone could apply to act who you would not have chosen for yourself.
A prospective Deputy will need to provide the Court with medical evidence that you have lost capacity to manage your affairs, as well as evidence that they are a suitable person to act in connection with your finances. Details of your assets, income, debts and family circumstances will also need to be provided to the Court.
The Court will consider the application and, if the application is successful, issue a Deputyship Order which will confirm the authority that is given to the Deputy. This application will usually take at least 6 months and no-one will have access to your assets during this time, which can be problematic if you have household expenses or care fees which need to be paid.
Sometimes it is necessary for additional Orders to be requested from the Court, for example if there is jointly owned property that needs to be sold.
Once a Deputyship Order has been granted, your Deputy will need to pay for a Deputy Bond (a type of insurance), pay an annual supervision fee and will be required to submit annual accounts which will include financial information as well as details of any significant decisions that they have made on your behalf.
Acting as an Attorney or a Deputy
Anyone who is asked to be an attorney or is considering making an application to act as an deputy should consider whether they have the skills and ability to act and whether they wish to take on the duties and responsibilities of the role.
An attorney or deputy must always act in the best interests of a person who has lost capacity to make decisions for themselves. They must also have regard to the principles of the Mental Capacity Act 2005 and Mental Capacity Act Code of Practice, which can be found here https://www.gov.uk/government/publications/mental-capacity-act-code-of-practice
The authority given under a Power of Attorney or a Deputyship order will be specified in the Power of Attorney document or Court Order and the terms should be read carefully.
A common query we receive is whether an attorney or deputy has authority to make gifts on behalf of a person. The authority to make gifts is very limited and if an attorney or deputy is considering making gifts on behalf of another person then we would strongly recommend that you seek legal advice in this respect to ensure that they are not acting outside of their authority.