A Lasting Power of Attorney (LPA) is a legal document that enables you to appoint another person or persons (your attorneys) to make decisions on your behalf should you ever be in a position where you are unable to make those decisions yourself.
Your attorneys will generally have exactly the same powers as you do to make the same decisions that you make now.
There are two types of LPA:
One relating to your property and financial affairs and one relating to your health and welfare. A property and affairs LPA allows your attorneys to make decisions about your house, or any other properties you may own, your bank accounts and other finances.
An LPA in relation to your health and welfare allows your attorneys to make decisions regarding your welfare, such as where you live, your daily routine and consent to medical treatment on your behalf.
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How long do they last?
Lasting Powers of Attorney only operate during your lifetime.
The powers granted to your attorneys will not extend beyond your death, i.e. they will not be able to manage the administration of your estate, as this will be dealt with by the executors appointed in your Will or the administrators appointed under the intestacy rules, if you do not have a Will.
Your LPA can only be used by your attorneys once it has been registered with the Office of the Public Guardian. You can choose to register your LPA as soon as it is created and your attorneys can either begin to use it straight away or it can be stored ready for use by your attorneys in the future.
If you do not use it straight away, your attorneys are under an obligation to register it if you begin to lose the capacity to manage your affairs by yourself and must do so in any event if they wish to begin using it.
Choosing who you appoint as your attorneys is an important decision and it is entirely your own.
There are no restrictions on whom you can appoint, except that they must be over 18 and must not be an undischarged bankrupt.
The role of an attorney is a very powerful one and so you must choose your attorneys carefully. You should only consider people whom you trust implicitly. They could have complete control of your finances and property and could even sell your home.
You can choose as many attorneys as you wish but if you choose more than one, you will need to decide whether they will be able to make decisions together or whether they should be able to act independently of each other. Your LPA will allow you to appoint your attorneys so that they can act:
- Independently of each other
- Together at all times
- Together and independently, or even
- Together in respect of some matters and independently in respect of others
You may choose replacement attorneys to act in the event that one of your original attorneys becomes unable to act for any reason, dies before you or no longer wishes to act on your behalf. Your attorneys cannot select their own replacement.
Instructions and Conditions
You can restrict what you want your attorneys to be able to do on your behalf, although it is important to bear in mind that the more you try to restrict your attorneys, the less effective your LPA can become.
One of the main possibilities you may wish to consider is adding an instruction to ensure that your LPA may only be used in the future if you lose capacity to make decisions for yourself.
You can also add any instruction relating to your attorney’s actions, i.e. restrict which investments they can deal with or make it a condition that they consult an expert advisor before dealing with particular assets.
Although this is not binding on your attorneys, they may find it helpful if you advise them of your feelings about certain issues. It can help them to make the decisions on your behalf that reflect your wishes.
Life Sustaining Treatment
Through your health and welfare LPA, you have the option of authorising your attorneys to consent to or refuse life-sustaining treatment on your behalf. You do not have to give your attorneys the power to make this decision for you. However, if you do, you can add your own guidance for your attorneys so that they understand what your wishes are in relation to life-sustaining treatment and in what circumstances you would like them to consent to or refuse it.
If you are making a health and welfare LPA, it is advisable to discuss your wishes and feelings about how you would like to be looked after, with your attorneys now, so that, if they need to at some time in the future, they can make the best decisions for you.
You can opt to allow your attorneys to receive payment for their actions in their roles as attorneys. This is likely to be required where you appoint a professional, such as a solicitor or an accountant, as your attorney.
Even if they are not receiving payment, your attorneys will be able to claim reasonable out-of-pocket expenses for travelling or telephone calls and other reasonable costs incurred whilst undertaking their duties as your attorneys.
For each LPA that you make, you will need to appoint someone to act as a certificate provider. This is someone who is happy to confirm that you understand the document and that you are not under any pressure to make it.
You can choose from two types of certificate provider; either someone who has known you personally for at least two years, or someone with the relevant professional skills and expertise to certify your LPA, for example, a medical professional or a lawyer.
There are restrictions on who can act as your certificate provider. Your certificate provider must not be a member of either your family or your attorney’s family, an employee or business partner or an employee of the care home, if you reside in one.
You can also name up to five people in your LPA who will be entitled to receive notification of when an application is made to register your LPA for use by your attorneys. Selecting people to be notified on registration of your LPA is an important safeguard.
These people would be able to raise concerns about the registration of the LPA on your behalf, if, for example, they do not consider that the registration of the LPA is necessary or they think that the person you have appointed as your attorney is not acting appropriately.
When should you make an LPA?
An LPA must be executed whilst you are still mentally capable of understanding the document and, therefore, it should not be left until something happens to you, as it may then be too late!
At Onions & Davies, we believe that everyone should consider making an LPA, particularly in relation to your property and affairs.
Both types of LPA can cover illnesses that may affect us all, for example, the effects of a stroke or Alzheimer’s disease and situations such as a car accident, which may cause you to become mentally unable to deal with your own finances.
LPAs can also assist in temporary situations, such as somebody signing important papers for you while you are out of the country or collecting your pension or paying bills whilst you are spending a short spell in hospital.
Unfortunately, it is not an automatic right for a husband, wife or next-of-kin to be able to make decisions on your behalf.
We would advise people of all ages to make an LPA as none of us knows what the future may hold or when the document may be needed.
If you do not wish the LPA to be used immediately, you can either arrange for it to be stored safely for the time being, or, only prepare the document now and register it at a later date (although do bear in mind the time scale for registering the document is several weeks), or you can put a restriction in the wording of the document.
What if I have not made one?
If you do not have an LPA in place (nor an old style Enduring Power of Attorney) and you become mentally incapable, your assets will be frozen and somebody, usually a relative, will have to make an application to the Court to be appointed as your Deputy.
This involves considerable red tape and is very expensive. It can often take as long as six months for a Deputy to be appointed, leading to delays in being able to access your money for payment of bills, care home fees, etc and/or in being able to make decisions concerning your health and welfare.
The Court will direct your Deputy in respect of the investment of your money and he or she would be required to produce annual accounts detailing how they have spent your money on your behalf. The overall cost and time involved is far greater than that of making and registering an LPA and would come at an already difficult time for you and your loved ones.
What if I have already made an Enduring Power of Attorney?
If you made an Enduring Power of Attorney before the change to the rules on 1st October 2007, this can still be used in the same way as it would have been, prior to the changes.
However, an Enduring Power of Attorney only allowed you to appoint attorneys to act on your behalf in connection with your property and finances and also did not allow you to appoint a replacement attorney.
You may therefore wish to consider making a Lasting Power of Attorney for your health and welfare. If you have any concerns about your Enduring Power of Attorney, please contact us.
Enduring Powers of Attorney could not be registered with the Office of the Public Guardian as soon as they were made but must be registered if the donor has become or is becoming mentally incapable of managing their own affairs.
Making a Lasting Power of Attorney is quite an involved process, especially in comparison with the old Enduring Powers but the options are more varied and the forms provide you with a lot more protection. It is much better to make an LPA than leave it to the Court, not just from a time and cost point of view, but also because you can decide who you wish to entrust with your affairs and what powers you wish to give them.
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This information refers to the law of England & Wales only, which from time to time changes. In particular, tax information changes annually. It is not a substitute for professional advice, which is up to date and specific to your needs. This information is a summary of the provisions relating to lasting powers of attorney and cannot cover every aspect of their operation. It represents our understanding of current legislation in England and Wales but should not be relied upon as an authoritative statement of law nor as constituting advice. We would advise that legal advice be sought in every circumstance.