What is a Lasting Power of Attorney?
A Lasting Power of Attorney (LPA) is a legal document that you (the Donor) make using a special form. It allows you to choose someone (the Attorney) who you trust to make decisions on your behalf about your property and financial affairs or health and welfare at a time when you no longer wish to make decisions about these matters yourself or you may lack the mental capacity to do so. Since the LPA contains a number of safeguards to protect you, it is a somewhat complicated document which you need to consider very carefully.
Who can make a Lasting Power of Attorney?
This can be done by nearly anyone who has the necessary mental capacity to do so. Briefly, you must be able to understand the effect of the LPA and to be able to complete the form and comply with all necessary legal requirements in doing so and be able to give instructions to your legal adviser.
The types of Lasting Power of Attorney
There are two different types of LPA:
- A Property and Financial Affairs LPA
- A Health and Welfare LPA
A Property and Financial Affairs LPA allows your Attorney to take a wide range of actions in dealing with your property and financial affairs. This could include, for example, selling your house; dealing with your investments; withdrawing monies from a Bank or savings account; dealing with your tax affairs; paying bills on your behalf including care and nursing home fees; dealing with your benefits; and to a limited extent making gifts on your behalf.
A Health and Welfare LPA will allow your Attorney to make decisions about your personal welfare. For example, where you should live; your day to day care; arranging your medical treatment and consenting or refusing such treatment on your behalf; arranging a care home or nursing home for you; organising your personal activities; dealing with social services on your behalf. It can also include a decision to turn off a life support system or refuse urgent life-saving medical treatment on your behalf.
Scope of Lasting Power of Attorney
You will see from the above examples that both types of LPA are very powerful documents because of the wide-ranging decisions that can be made on your behalf by your Attorney. In effect, and subject to any restrictions that you write into your LPA (see following) your Attorney will to a very large extent be entitled to deal fully with your property and financial affairs (in the case of a Property and Financial Affairs LPA) and your personal welfare (in the case of a Health and Welfare LPA) to the same extent as you could have done yourself. Whilst there are a number of safeguards which are built into the system (see following) it is very important when considering making an LPA that you very carefully consider such matters including the scope of the LPA and who you want to act as your Attorney. You may wish to discuss matters first with your prospective Attorney and in the case of a Health and Welfare LPA with your Doctor, and any relevant health or social care professionals, and in both cases with your family.
When will the Lasting Power of Attorney come into effect?
In the case of both the Property and Financial Affairs and Health and Welfare LPA, it is necessary for the appropriate form to be completed and the correct procedure complied with. This includes both you and your Attorney signing the LPA and your signatures being witnessed by an independent person. In addition, an independent third party with the necessary qualifications (a Certified Provider) must also sign the form to confirm that you understand the purpose and effect of the LPA and that you are signing it of your own free will. Only a limited number of people can act as the Certified Provider, including us as your Solicitor. It will then be necessary for the LPA to be registered with the Office of the Public Guardian after various persons specified by you have been notified (see following). It is only then that the LPA will become legally effective.
One very important difference between the two types of LPA is that the Property and Financial Affairs LPA can become legally binding once it is registered with the Office of the Public Guardian unless it contains a restriction that it should only come into effect once you have lost mental capacity to deal with your own property and financial affairs. On the other hand, in the case of a Health and Welfare LPA even when it is registered with the Office of the Public Guardian it will only become legally effective once you have lost your mental capacity to deal with your own personal and welfare affairs.
Choosing your Attorney
Subject to various exceptions (e.g. your Attorney must be over the age of 18, and not bankrupt) you can choose who you want to be your Attorney. This can be one person or more than one person. However, you must take great care in who you choose to be your Attorney. It should not only be someone who you trust, but also who has the ability to look after your affairs, financial or personal.
If you choose more than one person to be your Attorney then they can act either “jointly” or “jointly and separately”. If they act jointly then all decisions must be taken by all of your Attorneys. If they act “jointly and separately” then one of your Attorneys can take a decision by himself or herself. You can arrange for some of your matters to be dealt with by your Attorneys “jointly” and others by your Attorneys “jointly and separately”. You can also nominate a replacement Attorney to act if one of your Attorneys dies or if for some other reason is no longer able to continue acting. You will also need to decide if your Attorneys are to be paid anything other than out-of-pocket expenses for acting for you.
What are the safeguards that you have referred to?
The following are some of the important safeguards which are to protect you against abuse. Most of these have to be complied with before the LPA becomes legally effective.
- You as the Donor will be asked to confirm that you have received, read and understood guidance relating to the making and also the effect of the LPA. Some of this guidance is contained in the LPA form itself whilst there are also helpful and easy-to-read leaflets that have been issued by the Office of the Public Guardian. If you have asked us to be your legal adviser, you will be able to ask us any questions that you have.
- In making the LPA you can include limitations, restrictions and other provisions which will be legally binding on your Attorney. So, for example, you could exclude your Attorney dealing with certain property; limit the authority to deal with certain aspects of your personal affairs; or require your Attorney to consult with others before so acting.
- As mentioned previously, the Property and Financial Affairs LPA can contain a restriction that it should not become effective until you lose mental capacity. In this case, it may be that you would wish some of your property and financial affairs to be dealt with immediately and some only when you lose capacity. You could also include a provision whereby your Attorney has to produce accounts of any dealings on a yearly basis to a third party, such as your accountant. However, remember if you exclude various activities in your LPA then your Attorney will not be able to deal with these matters on your behalf, and you will need to consider the consequences of this aspect carefully with your adviser (see following).
- You can give guidance to your Attorney in your LPA but this will not be legally binding, although your Attorney will have to take it into account. This could include, for example, guidance that your Attorney should have access to your Will and should take account of the provisions in your Will when acting, or should not deal in certain types of investments, or should deal with certain day-to-day matters for you in a certain manner, or after consulting with a third party, such as your social worker.
- Reference has already been made to a Certified Provider who must certify in the LPA that the terms and effect of the LPA have been explained to you and that you understood these and signed the LPA of your own free will and without any pressure.
- Also, as already mentioned, before the LPA can be effective, it must be registered with the Office of the Public Guardian. However, in most cases before it can be registered, at least two persons nominated by you must be informed of the intention to register. Such “named persons” will then be able to object to the registration of the LPA on certain grounds or to raise certain queries or concerns. This is a very important safe-guard, and is particularly important if when registration is to take place you lack mental capacity. You should choose these named persons very carefully.
- The Attorney has to confirm in writing that he or she has read the relevant information as to the obligations of being an Attorney and understands the duties imposed on an Attorney of an LPA, and will comply with the necessary requirements set out in a special Code of Practice. The Code is very detailed but the basic principle is that any actions the Attorney takes must be in your best interests and your Attorney must (where possible) consult with you before acting.
- In addition to the above, you can take other steps to protect yourself, for example, appointing more than one Attorney and ensuring that they act “jointly” (see above) or advising other friends or relatives of what you are doing so that they are aware of the situation.
Are there any risks in making a Lasting Power of Attorney?
An LPA is a powerful document which, subject to any restrictions or limitations that you place in it, will give your Attorney very wide powers of dealing with your property and financial affairs and making a very wide range of decisions about your personal welfare, It is therefore open to abuse. The main safeguards have been listed above. However, please remember, you will be dependent upon the good faith and skill of your Attorney over whom there will be very little supervision. The Office of the Public Guardian is only likely to become involved if they are informed of misuse of an LPA or that your Attorney is acting dishonestly or improperly. You must weigh up these matters against the advantage of having someone to look after your property and financial affairs and your welfare when you are not able to do so yourself.
What if I do not make a Lasting Power of Attorney?
It may be that you decide that you do not wish to make an LPA or that it should only relate to part of your property or some of your personal welfare. It may be that you consider that there is no-one suitable to be your Attorney, or that if you make an LPA this would result in family conflict. You may decide, for example, that you are happy for a member of the family to assist you with your property and financial affairs and personal welfare but on an informal basis.
In all these circumstances you will continue to be responsible for dealing with your own affairs but if at any time you become mentally incapable of doing so then someone (usually a member of your family) will be able to apply to a special division of the Court called the Court of Protection to be appointed to act as your Deputy and his or her actions will then be supervised by the Court of Protection. This should mean that there is less risk of abuse or misdealings but the Court of Protection will make charges for the cost of supervision. It also means that you will not have been able to decide in advance how you would like your property and financial affairs and personal welfare to be dealt with.
The above can only represent a very general explanation about the effect of making a Power of Attorney and the procedures for doing so. It also sets out some of the matters that you need to consider. It is not intended to be a full explanation of the law and procedures relating to a Lasting Power of Attorney and you are strongly urged to take legal advice before proceeding any further.
No responsibility is taken by our firm if you fail to do so.
We will provide you with a friendly and efficient service including home visits where appropriate to discuss your options and requirements in connection with the very important and sensitive decisions that you will need to make.
Please contact Cyril Rose on for further information.