Lasting Powers of Attorney? What is that?
Our Head of Department for Wills, Probate and Life Planning, Lisa McBrearty, covers information on Lasting Power of Attorneys (LPAs)
Most of us appreciate the importance of writing a Will. However, have you given any thought to who would manage your affairs if you were incapable of doing so, either physically, for example if you were in hospital for an extended period, or mentally, perhaps if you were diagnosed with dementia?
As part of your lifetime planning, you should consider putting in place Lasting Powers of Attorney.
Prior to October 2007, it was possible to appoint someone to safeguard your interests and to act on your behalf in respect of your financial affairs by an Enduring Power of Attorney (EPA). If an attorney appointed under an EPA considers that the donor of the power is losing mental capacity, a simple procedure enables the attorney to register the EPA with the court and proceed as before with little further court involvement. EPAs made prior to 1st October 2007 remain valid and capable of registration for so long as the donor is alive. However, an EPA only enables an attorney to deal with financial affairs. It was also felt that the relatively simple procedures could result in the system being abused. Therefore a more complex and robust system was introduced to enable attorneys to be appointed not only to look after a person’s financial affairs, but also to make decisions on their behalf relating to health and welfare issues. The new types of document are known as Lasting Powers of Attorney (LPAs).
A Lasting Power of Attorney is a powerful document. It endures beyond the loss of your mental capacity so the person appointed can continue to act on your behalf even when you are no longer capable of managing your affairs.
There has been an increase in the number of Lasting Powers of Attorney being registered in England & Wales in recent years, perhaps due to the convenience and peace of mind that having these documents in place provides to families and loved ones.
Two types of power
Under the current law, there are two types of LPA. The first enables you to give your attorney(s) the power to make decisions about your money and property, for example managing your bank or building society accounts, paying your bills, collecting your benefits or selling your home.
The second type of LPA enables your attorney(s) to make decisions about your health and welfare, for example your medical care, where you should live or whether to give consent to life sustaining treatment.
A separate document is required for each, thus a “Lasting Power of Attorney for Property and Financial Affairs” and a “Lasting Power of Attorney for Health and Welfare”.
When can an LPA be used?
Before an LPA can be used, it must be registered with the Office of the Public Guardian, where it will be placed on a public register.
It is important to note that the Lasting Power of Attorney for Property and Financial Affairs can be used as soon as it is registered, with your permission. In contrast, the Lasting Power of Attorney for Health and Welfare can only be used when you are unable to make your own decisions.
It can take several months to register an LPA. It is therefore a good idea to deal with the registration as soon as the documents have been prepared so that they are available for use at short notice. There is currently a court fee of £110 for each LPA document that is submitted for registration.
Who should you appoint?
Deciding who to appoint as your attorney(s) is a very important decision and you should consider carefully who you would trust to act in your best interests. You can appoint any number of attorneys, although perhaps more than three or four may cause practical difficulties. The law allows you to appoint replacements in the event that your attorneys are unable to act. The forms also provide an opportunity for you to express any particular wishes you may have in connection with the appointments, as well as guidance for your attorneys in the decision-making process.
Why would you consider making an LPA for Property and Financial Affairs?
Physical or mental incapacity can occur at any time through unexpected illness or accident, so you do not need to be elderly to consider making an LPA. If the worst should happen, creating an LPA will give you the reassurance of knowing that you have put arrangements in place for someone to take over at what will certainly be a very difficult and distressing time for your family. If you do not have an LPA in place in such circumstances, an application will need to be made to the Court of Protection to appoint a “deputy” to act. The Deputyship process can be costly, time-consuming and extremely stressful and means that you have lost the right to choose who will have the responsibility of looking after your affairs.
Bear in mind, however, that an LPA for Property and Financial Affairs can be put to use at any time, once registered, and you do not need to have lost your mental capacity for this. There may be occasions, for example, when you are overseas or simply unavailable for some purpose and your Attorney(s) will be able to make use of the document to act on your behalf.
Why would you consider making an LPA for Health and Welfare?
If you were to lose your mental capacity, decisions may need to be made about your medical or general care and living arrangements. Social services or other institutions may become involved and, although your next of kin would normally be consulted in such circumstances, more formal authority may be required to make some decisions for you. A legally appointed Health and Welfare Attorney would have this authority, subject to any restrictions you may have placed in the LPA.
A Health and Welfare LPA specifically includes an option to allow your Attorneys to give or refuse consent to life sustaining treatment, a heart-wrenching decision for the person faced with this choice, but which could be made easier for them if you have considered the possibility and expressed your preference in the LPA document.