Overview – why are Lasting Powers of Attorney important?
Lasting Powers of Attorney (LPAs) are lengthy statutory documents in which you can give one or more persons (your Attorneys) legal power to handle your property and financial affairs, or power to make health and welfare decisions if you become unable to do so for yourself.
There are two types of Lasting Power of Attorney:
- Financial Decisions LPAs deal with all aspects of your finances.
- Health and Care LPAs deal with personal decisions about you and your medical treatment.
You can appoint more than one Attorney and you can decide whether they can act independently (jointly and severally) or that they must always act together, or a mix. You can also decide whether one Attorney is better suited to a particular job and leave specific guidance to your Attorneys on how you would like them to act.
You can appoint the same Attorneys to look after your finances and your welfare or you can appoint entirely different people. The Attorneys can be professional, family or friends but should always be people you trust.
Both forms of LPA must be registered before use with the Office of the Public Guardian. This can take several months, and there is a registration fee of £84 per power.
Lasting Power of Attorney – Financial Decisions
Under a registered Financial Decisions LPA, your attorney can deal with all the following matters on your behalf:
- Operate your bank account(s)
- Buy and sell property
- Pay your household bills
- Claim benefits and pension payments
- Pay care fees or private medical bills
Your Attorney cannot (without a court order):
- Make any large gifts
- Make a Will
- Disclaim any property you might inherit
You can restrict the use of the LPA until after you lose mental capacity, but most people are happy for it to be activated before then.
Lasting Power of Attorney – Health and Care
Health and Care LPAs also have to be registered, but operate only if you do not have sufficient mental capacity to make the relevant decision. The Attorney can deal with the following matters on your behalf:
- Decide where you should live
- Make decisions about your medical treatment
- Decide what social activities you can participate in
- Deal with your social and health care issues
- Make day to day decisions on your behalf
Your Attorney cannot:
- Agree to adopt a child on your behalf
- Agree to a marriage or civil partnership
- Vote in an election
- Consent to some medical treatment dealing with mental disorder
- Agree to a divorce (or dissolution of civil partnership) on the basis of two years’ separation and consent
There are a few safeguards:
- An independent third party has to certify that you have capacity to create the LPA and are doing so without coercion or undue influence.
- Next, you may name people to be notified that the compulsory registration process has started, and these will have the opportunity to object on certain grounds if they suspect any funny business.
- Attorneys must always act in accordance with the Code of Practice under the Mental Capacity Act 2005. If they ignore the code, there may be the risk of a criminal offence.
- Attorneys must also observe the restrictions and conditions you put in the power, and must comply with directions of the Court of Protection. The Court will investigate Attorneys if alerted to the possibility of abuse.
If you do not have an Enduring Power or Lasting Power of Attorney, and you lose mental capacity, it’s frankly a bit of a mess until someone gets a Deputyship order from the Court of Protection.
This order can be either for Financial Decisions, or for Health and Care matters.
Like the former Receivership proceedings, Deputyship proceedings are very costly and slow, but without an order, no-one can lawfully access your funds, for example to pay nursing home fees.
Enduring Powers of Attorney
Until October 2007, people could create a much shorter document called an Enduring Power of Attorney (EPA) to give someone authority to handle finances.
Lasting Powers (Financial Decisions) are now the new EPAs, but any Enduring Powers properly created before the law changed will remain valid and won’t need changing.
EPAs don’t get registered until you lose (or start losing) your mental capacity. EPAs do not extend to health and care issues.