Lasting Power of Attorney
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Will Power’s very own Liz Killip explains Lasting Power of Attorney and answers some frequently Googled questions.
What does Lasting Power of Attorney mean?
A Lasting Power of Attorney (LPA) is a legally certified document that allows a person to act for you if you can no longer make decisions or sign documents yourself.
What are the two types of Lasting Power of Attorney?
First there is the property and financial LPA is where you appoint someone you trust – called an attorney in legal terms – the attorney will look after your financial and property affairs should you ever be unable to deal with them yourself.
The second one is a health and welfare LPA, where someone you trust makes decisions about your health and welfare if you’re unable to due to mental or physical incapacity.
You can only actually use the health and welfare LPA when you have lost your capacity and it is registered, whereas you can use the property and financial LPA anytime once it is registered.
There’s another type of LPA that can be drawn up if you have a business. You can create a specific business LPA to appoint someone to look after your affairs when you’re unable to deal with them yourself because you’re away, ill or injured.
When should I think about Powers of Attorney?
When you’ve made the decision to write your wills it makes sense to put LPAs in place at the same time. It means you can wrap it all up in one go rather than put it off, and potentially never get back to it.
You can make a LPA at any age, and you never know whether you might suffer an accident, injury or a stroke which renders you unable to make your own decisions. Even if it’s only for a short time while you’re recovering, LPAs make life a lot easier for people in your family, as they can make important decisions on your behalf.
They can also be important if you’re out of the country a lot of the time. Perhaps you work abroad, in which case a LPA means someone can deal with your affairs in your absence.
Should everyone have an LPA?
Most people think we only need them when we’re old or have lost capacity. Unfortunately you never know when you might have an accident or injury, so we always recommend putting in LPAs sooner rather than later. It doesn’t do any harm, because they don’t have to be used.
What’s the difference between an Enduring Power of Attorney and a Lasting Power of Attorney?
Enduring Powers of Attorney don’t exist anymore. For many years an EPA would be put in place to make property and financial decisions, but they were replaced in 2007 by the two types we’re discussing here.
An EPA provides no specific allowance for decisions related to health and welfare – it was literally property and finance only. LPAs have a lot more flexibility. If you do have an EPA currently in place, made prior to 2007, it’s still valid – but only for property and finance decisions. It is also be more complex to register and start using it.
The new LPAs are more versatile and comprehensive, giving you a lot more safeguards and protection. On an EPA, where several people have been appointed, they are required to act jointly to make a decision. Whereas with a LPA you can appoint them either jointly or ‘jointly and severally’ – meaning they can act on their own or together.
You can specify on your LPA how you want people to act for different parts if need be. We do recommend replacing an existing EPA with an LPA, as that gives you the freedom to review it at any time.
There are several situations where you can call on a substitute attorney with a LPA, which again you can’t with an EPA. Perhaps the original attorney dies; or you lose contact with them; they might no longer want to continue in the role; if you get divorced you may want to change your attorneys – and these types of amendments are fairly simple to do.
What is the role of an attorney?
An attorney is normally a family member or friend who is going to be able to make decisions about your finances, health and welfare. Sometimes they can be difficult decisions, but they don’t have to make those decisions alone. They can do it with other appointed attorneys.
When you make a LPA you appoint one or more individuals as attorneys and you can explain what kind of decisions they can make and under what circumstances. On the health and welfare side, for example, they can make decisions about whether you can be moved into residential care or stay at home.
An attorney has quite a lot of legal responsibility, which includes acting in the donor’s best interests – the donor being the person setting up the LPA. They must act in accordance with terms of the LPA which are quite powerful documents. Attorneys can and should help the donor make their own decisions where possible rather than taking control.
In the process of making the LPA, your attorney is required to sign a statement to confirm that they understand their legal responsibilities in this role. They could be ordered to compensate the donor for any losses they suffer if they do not perform their duties properly.
If things go really horribly wrong an attorney can even face criminal charges – for example for ill-treating or willfully neglecting the donor. So you’ve got to have someone that you can completely trust.
Who can be an attorney?
You can choose anyone you want as long as they’re over 18. For the property and financial one, they cannot be bankrupt. You choose someone who knows you well and you trust to make decisions.
They need to be reliable and have the skills to carry out the role. It’s also helpful to think about how well they manage their own finances and decisions about their own wellbeing or the wellbeing of others.
Because your attorney may not be needed to make decisions until some time in the future, it’s probably best not to choose someone older than you. Most people choose a family member or a close friend to be their attorney. I’ve got my children as my attorneys.
You need to talk to the person you want to appoint as your attorney in advance. Tell them your wishes and preferences and make sure they’re happy taking it on. You also have the option to employ a professional such as an accountant or solicitor as your attorney.
That’s something to think about for a property and for financial LPA if you don’t have anyone you feel happy about choosing, or if there are conflicts within the family. Obviously a professional will charge for their time. These charges can vary, but you can talk to them and understand the costs before making any decisions.
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What can an attorney not do?
A LPA doesn’t give an attorney unlimited authority to make decisions on behalf of the donor. If they’ve only got the property and finance LPA, attorneys can’t make decisions about their health and welfare – and vice versa.
You can’t act as an attorney until it’s been registered with the Office of the Public Guardian, and the LPA may only authorise you to act if the donor lacks mental capacity. This restriction actually automatically applies to any health and welfare LPA, and can also be put on the property and finance one.
If you’ve been appointed as health and welfare attorney, you can only make decisions regarding life sustaining treatment if the LPA specifically says so.
LPAs can also put further restrictions on the decisions you can take – for example that you cannot make gifts. If you’re only authorised to act where the donor lacks mental capacity, you will need to check whether they have that capacity on a decision-by-decision basis.
For example, they might be capable of making small decisions such as what to wear, but not complex decisions about where they can live or managing financial issues. You should start from the assumption that the owner is capable and look for ways to help make the decision, rather than just taking control.
If you’re unsure about whether the donor has capacity or not, you can get an expert opinion from a doctor. Do bear in mind that if someone simply disagrees with you or makes unusual, eccentric decisions, it doesn’t mean that they lack capacity per se.
When should you create a Lasting Power of Attorney?
When you’re writing a will it makes sense to put in place a LPA at the same time. You can have an accident at any age or an injury that renders you unable to make your own decisions. You might have a stroke and be unable to physically sign something.
A LPA makes life a lot easier for your loved ones as they can make important decisions on your behalf. It doesn’t matter what age you are – make a LPA and have it there in the background.
What happens if I don’t have a Lasting Power of Attorney?
If something renders you incapable of managing your own affairs or even communicating your wishes, your family is going to face a great deal of difficulty and possibly financial hardship.
A LPA protects your interest and provides a legal vehicle for the management of your financial and health affairs. It’s an excellent opportunity to provide guidance to your attorneys on how they should conduct your affairs and how you wish to be cared for. Without this, they can only guess at your wishes.
Without a health and welfare LPA, health professionals or the local authority can make decisions on your behalf without the consent of your family – even if they know you would be unhappy. Without an LPA there’s nothing they can do about it, unfortunately.
How do I get a Lasting Power of Attorney?
At Will Power we can advise you on the LPA process from start to finish, including registration at the Office of the Public Guardian. Our consultants or our LPA expert in the office would take down instructions and discuss with you who should be the attorneys.
A certificate provider is also needed on a LPA – that’s just someone who’s known you for a at least 2 years. They testify that you’re in your right mind and that you’re not being made to do the LPA under duress. They simply sign the document and they don’t ever get involved with the LPA itself.
Often we set up LPAs as part of arranging a will for a client, but even if you haven’t got a will we can arrange LPAs over the phone, in the office, by Zoom or face-to-face. We have an expert in the office who’s been here for years, who draws up the LPAs. She is always available to answer any questions.
There’s a really strict signing procedure and many errors can be made in signing which can cause huge delays with the Office of the Public Guardian. So although we send out comprehensive instructions you can just call with any queries.
How much does it cost to set up a Lasting Power of Attorney?
Our fees are on the website. For a property and financial LPA it’s £350 for a single person, or £650 for a couple plus VAT. It’s exactly the same cost for the health and welfare LPA.
If you decide that you want both LPA types then there’s a slight reduction – £550 for a single person and £950 for a couple plus VAT. On top of that, once all the documents are completed and signed there is a registration fee which isn’t payable to us, it goes direct to the Office of the Public Guardian – that’s £82 per LPA, with no VAT.
Can a family member challenge a Power of Attorney?
Yes, they can. If anyone believes that an attorney is not acting in the best interest of the donor, or potentially abusing their position, they can report this to the Office of the Public Guardian which oversees these roles. I’ve also heard in the past that some people have gone to the police to report an attorney that is mismanaging their role.
Can a Lasting Power of Attorney override a will?
No. A Lasting Power of Attorney is completely separate to a will. A Lasting Power of Attorney is only applicable when you’re alive, for your benefit. A will only applies after your death. A Lasting Power of Attorney ceases to have any effect when you die.
Your attorneys should tell the Office of the Public Guardian that the person has died and that is recorded on their register. It’s not essential, but that’s a service we also provide when we receive a death certificate.
What else do we need to know about LPAs?
Some people think they will wait until they’re older to get a LPA in place – that they can do the paperwork and then save money by not registering them. But it’s really important to know that you can’t use a LPA until it has been registered.
Even though you’ve completed the form, it’s not legal until it’s been registered with the OPG and it comes back with a stamp on each page. No bank or institution would accept it without that approval.
Currently, it’s taking at least four months for the Office of the Public Guardian to register an LPA. They’re really behind. So if something happens, the LPA wouldn’t come into effect for at least another four months. That could be four months where no one can access your accounts or make decisions about your health and welfare – so holding back really is a false economy.