Lasting Power of Attorney – Frequently Asked Questions
No-one likes to think about losing the ability to manage their own affairs, but approximately 820,000 people in this country have some form of dementia. Many others suffer from strokes, brain injuries or have mental health problems and the truth is, there are many things that can impact on someone’s ability to look after their own affairs - regardless of age. In fact, you almost certainly know someone in this situation.
Whilst it’s an uncomfortable thought - and no-one ever believes it will happen to them - around 2 million people in the UK lack mental capacity and it’s something that can happen to anyone, at any time.
Understanding Lasting Powers of Attorney
A Lasting Power of Attorney (LPA) prepares for the eventuality of someone losing the capacity to manage their own affairs and this page should answer any questions you have about them.
A Lasting Power of Attorney is a legal document that lets you (the 'donor') appoint one or more people (known as 'attorneys') to help you make decisions or to make decisions on your behalf.
The important thing is that, by electing to create an LPA, you get to choose who will act on your behalf. This means that you get to choose the people you can trust. People that will fulfil their legal responsibility to act in your best interests.
The 'Donor' is the person creating the Lasting Power of Attorney. The person giving instructions to allow other people or organisations (the Attorneys) to act on their behalf when the time comes that they need help to manage or are unable to manage their own affairs.
An 'Attorney' is a person or organisation who has delegated authority to act on behalf of someone (the 'Donor') through a Lasting Power of Attorney (LPA).
An Attorney has a legal obligation to act in the best interests of the Donor and has full control over the Donor's Property and Financial Affairs and/or Health and Care.
Up to four attorneys and a similar number of reserves are allowed.
You have the option to appoint your attorneys jointly - which means they all must sign and agree every decision, or you can appoint them jointly and severally, which means any one attorney can act on your behalf.
We typically advise the latter as this makes the operation far easier.
This covers how your Attorneys can make decisions on your behalf.
If you want your Attorneys to make every decision together then you should appoint them jointly - which means they all must sign and agree every decision.
If you're happy for each of your Attorneys to make decisions on their own, you should appoint them jointly and severally, which means any one attorney can act on your behalf.
We typically advise the latter as this makes the operation far easier but we would advise that your Attorneys should still communicate over decisions - especially major ones - and share all information on a regular basis.
There are two types of Lasting Power of Attorney,;
- The most common type covers your property and financial affairs. It gives your Attorneys the authority to make financial decisions on your behalf and grants them access to all of your finances.
- The second type covers your Health and Welfare and it gives your Attorneys the authority to make decisions on your behalf regarding your health and care needs. It includes authority to give or refuse consent for medical treatment and deciding where you live should you require care.
Many people assume that those making the financial decisions also make decisions relating to health and care. This isn’t the case, which is why we generally advise having both in place.
Clearly, it's a good idea to appoint Attorneys that know you well and understand what you would want in any given situation. It's also very important your Attorneys are people or organisations you trust, implicitly.
Anyone aged 18 or over, with the mental capability to do so, can make an LPA, but it can only be used once it is registered with the Office of the Public Guardian.
An Enduring Power of Attorney (EPA) was replaced by the LPA in October 2007.
An EPA only gives your Attorneys authority over your property and financial affairs. The don;t have any say over your health and care, which is one of the reasons that LPA's were introduced to replace them.
Many people set up EPA's prior to October 2007 and if you have an EPA in place, it should still be valid.
The Court of Protection is the organisation that make decisions on financial or welfare matters for people that don't have an LPA or EPA in place, who are vulnerable and who lack the mental capacity to make decisions for themselves.
The Court may appoint a deputy to make certain decisions, usually about property and financial matters, on behalf of the person who lacks capacity on an ongoing basis, subject to supervision by the Office of the Public Guardian (OPG).
They're responsible for;
- Assessing whether someone has the mental capacity to make a particular decision for themselves.
- Appointing deputies to make ongoing decisions for people who lack mental capacity.
- Granting permission to people to make one-off decisions on behalf of someone who lacks mental capacity.
- Handling urgent or emergency applications where a decision must be made on behalf of someone else without delay.
- Making decisions about LPA's or EPA's and considering any objections to their registration.
- Considering applications to make statutory wills or gifts.
- Making decisions regarding deprivation of liberty under the Mental Capacity Act.
The Court of Protection is based in London and the majority of cases are heard by district judges and a senior judge but can sometimes be heard by High Court judges.
Obviously, where the Court of Protection becomes involved, the person that lacks capacity will have costs to pay and, worse still, decisions can take a long time.
The Office of the Public Guardian (OPG) compiles and maintains the register of Lasting Powers of Attorney and Enduring Powers of Attorney.
The OPG has a statutory responsibility to supervise those acting as as Attorneys (appointed through an LPA) or Deputies (appointed by the Court of Protection).
The level of supervision tends to be more onerous with court appointed Deputies.
Some Common Questions and Misconceptions
There are many misconceptions about LPA's and it's important to understand what would happen if you wre to lose the capacity to manage your own affairs and didn't have an LPA in place.
It’s a common misconception that, in the absence of an LPA, your partner or a close family member (next of kin) can make decisions on your behalf when you are no longer able to do so. This isn’t the case.
In this situation, there may well be a complicated legal process to go through and your partner or next of kin may find themselves with something of a battle on their hands. They may also feel way out of their depth to deal with it.
Our advice is to make an LPA and put things in place, just in case.
It’s another popular misconception that joint bank accounts can still be used when one of the account holders loses capacity. This isn’t true.
In practice, the bank will freeze joint bank accounts, unless there’s a Lasting Power of Attorney in place.
For most people trying to deal with a partner that has lost capacity, this represents a significant issue and in cases where there is only a joint bank account, it may be impossible to access money, at all.
For many of us, such a scenario would create inconceivable problems at an already difficult time.
If you lose capacity and don’t have a Lasting Power of Attorney in place, the Court of Protection will become involved and most likely appoint a Deputy to manage your affairs for you.
This will involve significant legal fees, including annual supervision fees of up to £800, application fees, doctor’s certification fees, a security bond, a deputy fee and a long delay before the Deputy Order is issued.
Of course, the deputy appointed probably won't know the person they act for and is unlikely to be aware of their personal circumstances or their wishes in any given situation. They probably won't know any family members, either.
This means that someone you don't know, who has no prior knowledge of what you would want in any given situation, who doesn't know your family and isn't familiar with your specific wishes, ends up making what they believe to be, decisions about what they think is in your best interests.
if that thought causes you some concern, we would urge you to make an LPA as soon as possible.
Yes. If you wish to apply limits to the authority of your Attorneys, you can do so when you make your LPA.
We would advise you to discuss what you would want to have happen in any given situation with your prospective Attorneys, before you appoint them. That way, you can make sure that they're on the same page as you and you can agree what, if any, limits should be placed on their authority, in advance.
In order for an LPA to come in to effect, it has to be registered with the Office of the Public Guardian (OPG).
An LPA can be registered at any time and many people choose to register their LPA at the point the Donor loses capacity. In our experience, this can be fraught with problems for the Attorneys and can take up to 10 weeks, according to the government website.
As you can imagine, if the time has come where decisions need to be made, registering an LPA at this stage will cause some issues and lead to a great deal of frustration for the Attorneys.
We advise registering an LPA as soon as you make it and, once registered, your attorneys can act on your behalf or assist you in making decisions, even if you still have capacity. In practice, it only comes into play only when you're no longer capable of making the necessary decisions.
By making and registering an LPA, and by making sure that your Attorneys are well aware of your wishes, there will never be any delays or issues for them. When the time comes, they will simply be able to act in your best interests.
Even if your LPA has been registered, while you have capacity, you are still in control of managing your own affairs and there are several things you can do with your LPA;
- You can stop the LPA.
- You can sack some of your attorneys.
- You could appoint new Attorneys.
However, the power becomes irrevocable once you lose capacity. At that point, your attorneys will have the power until you or they pass away or until you or they are declared bankrupt or until they themselves lose capacity.
To register an LPA you need to send the completed LPA document, an application form and a cheque to cover the fee to the Court of Protection.
The Court of Protection Registration Fee is, currently, £82 per LPA and is a one-off payment.
Depending on your circumstances, you may be eligible for a remission or exemption of this registration fee, but this would depend on your circumstances.
Approval takes between six and ten weeks.
It makes sense to plan ahead and set up an LPA - even if you feel that the need is someway in the future.
The Lasting Power of Attorney process is far more complex than the previous Enduring Power of Attorney regime and now requires the signatures of yourself, as the donor, your attorneys, to accept their responsibility, and witnesses.
You also need a Certificate Provider to attest that, in their professional opinion, you understand what powers you're granting to your Attorneys.
The completed LPA document, an application form and a cheque for £82 must be sent to the Court of Protection. Approval takes between six and ten weeks.
The information provided here is intended to address the types of questions that people are often concerned about.
To see an outline of what we do and how we deliver services for our clients, please visit the Our Services page. You will find information on the key aspects of creating your will including:
Personal Reviews, Will Writing, Estate Planning & Tax Management, Lasting Power of Attorney, Discretionary Trusts, Special Provisions & Assurance (disabled beneficiaries), Severance of Tenancy, Secure Document Storage.
If you have a specific question, want more detailed information or want your will professionally prepared, then please just get in touch.