Lasting Power of Attorney – The Impact on You and Your Loved Ones

There are a number of reasons why you might need a person to look after your affairs or make decisions and act on your behalf.

This might be temporary, if you are on holiday or hospitalised and need help with paying your bills, or long-term, if you suffer from an illness that prevents you from making a decision regarding your finances, for example.

Either way, a power of attorney can help you with making decisions about your health, finances, welfare, property or business.

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A power of attorney is a legal document in which you (‘the donor’) appoint someone else (‘the attorney’) to act on your behalf and in your name.

There are two types of power of attorney: the ordinary power of attorney; and the lasting power of attorney.

Ordinary Power of Attorney

The ordinary power of attorney is a statutory form that can be used in a wide range of circumstances and for a specific period of time. This form of power of attorney is only used when you have the mental capacity to make decisions but, for some reason, you are unavailable to act in person.

For example, you might be out of the UK for a longer period of time or on holiday and you might need someone to manage your property or financial affairs while you are away, to handle and sign documents for you.

Such a power can be general (meaning without any restriction) or limited to specific affairs.

This type of document doesn’t need to be registered to become valid; it only needs to be signed by the donor, as a deed, in the presence of an independent witness.

If you lose mental capacity, the power of attorney is automatically annulled.

If you want to plan ahead in case you lose mental capacity in the future, you need a lasting power of attorney, which is a more specific and complex form of power of attorney.

Lasting Power of Attorney

An LPA is a legal document that allows you to appoint one or more persons to make decisions and act on your behalf in case you lose your mental capacity.

The law allows you to appoint one or more attorneys in advance to make decisions not only for financial matters, but also about health and personal welfare.

Both LPAs continue in effect if you lose mental capacity.

By signing a lasting power of attorney you ensure that your interests are protected by someone you trust in case you are unable to manage them yourself – perhaps if you have had an accident or illness.

If someone is diagnosed with a condition that is likely to cause loss of mental capacity, such as:

- Stroke

- Coma

- Delirium

- Neuro-disability/brain injury

- Alzheimer's and other forms of dementia

Then, it is highly advisable to think about who will take care of their affairs and make decisions for them.

It may be difficult to think that you might lose your mental capacity one day, but it is reassuring to know that your wishes and preferences are being managed by someone you choose.

It is always better to think ahead and plan for the future.

You don’t necessarily have to be unhealthy to consider making a lasting power of attorney. In fact, the time to make an LPA is when it is least needed. This can be done once you are 18 and while you are still capable of understanding the nature of this legal document and its implications.

The earlier you decide to draw up a lasting power of attorney, the better.

Why Do You Need a Lasting Power of Attorney

Many people assume that their spouse, partner or children can make decisions on their behalf in case a life-changing accident happens, but this is not the case as they don’t have the legal authority to do so.

If someone wants to manage your affairs and you have no LPA in place, that person needs to apply to the Court of Protection, a process that is significantly costlier and lengthier than appointing an attorney through an LPA.

In this case, the decision will not be in your hands as the Court decides who to appoint to act as your ‘deputy’, which is a different type of appointment.

If you want to be sure that a particular person will have the legal authority to take care of things and act only in your best interests, then you need a lasting power of attorney.

Types of LPA

The powers of an attorney are not limitless; therefore, before making the LPA, you need to be aware of what an attorney does. Also keep in mind, that once you sign the LPA you don't suddenly lose control over your affairs since you can choose whether the LPA can be used before or only when you lose mental capacity.

There are two types of LPA: Health and Welfare; and Property and Financial affairs.

Property and Financial Affairs

Your attorney will be empowered to manage your bank account, pay your bills, buy or sell your property, invest your money or deal with your benefits, only if you give him/her permission to do so.

This type of LPA can be used while you still have mental capacity, therefore you can restrict the type of decisions your attorney can make.

Also, you can state that the LPA can come into force once you have lost mental capacity, but also in other situations such as if you suffer from an illness, have mobility issues or if you spend time outside the UK.

Health and Welfare

This LPA can only be used if you have lost mental capacity to make the decision yourself.

The attorney can generally decide on things like medical care, your daily routine, such as what you should eat, where you should stay, what kind of social activities you can take part in or even decide on life-sustaining treatment.

When making decisions, your attorney must follow the Mental Capacity Act. This means that they:

- must act in your best interests;

- must take into consideration your wishes;

- cannot take advantage of you to their benefit;

- must keep their finances separate from your own;

There are also safeguards to ensure the attorney acts in good faith. The Office of the Public Guardian monitors the actions of the attorney and will become involved in case he/she is found to be abusing the powers. The attorney could even face civil or criminal proceedings.

How to Set Up an LPA

1. Choose Your Attorney

The first thing you need to do if you want to set up a power of attorney is to choose your attorney, keeping in mind that he/she must be at least 18 years old.  The attorney can be a relative, friend or business partner, but they don’t necessarily need to be British citizens or live in the UK.

If you want to appoint more than one attorney, then you must decide how they will make the decisions:

- Together - they must all agree before acting on a certain issues;

- Jointly and severally - they can act together, but also on their own;

- Jointly in respect to some matters and severally in respect to others. This means that they must agree on certain issues, but act independently for others.

Choosing an attorney is a decision that is worth thinking about carefully. Make sure that you fully trust the person as the cases of fraud and abuse of power are more frequent than you may think, even if they are closely monitored.

Not everyone is cut out to be an attorney, especially in stressful or time sensitive matters. Therefore, you should take into consideration how well the person you want to appoint as your attorney looks after their own affairs and whether or not they will be happy to make decisions on your behalf.

2. Fill in the Forms

The second step is to fill in the forms, either online or in writing. There are separate forms for the two types of LPA. The forms must be printed and signed by the attorney(s), witnesses and an independent person, called a Certificate Provider, who protects your interests, then sent to the Office of the Public Guardian.

The Certificate Provider ensures that:

- you (the donor) are not under pressure to draw up the LPA or being defrauded;

- you are mentally capable of making the LPA;

- understand the purpose of the LPA and the authority that is being granted;

- you are not influenced by something else that could affect the validity of the document.

There are two types of certificate provider:

- Knowledge-based - someone who has known the donor for a minimum period of two years;

- Skill-based - someone with relevant professional skills and expertise. It can be one of the following:

- A registered healthcare professional;

- An independent mental capacity advocate;

- A registered social worker;

- A barrister, solicitor or advocate;

- Any other person that you consider having the professional skills and expertise to be a Certificate Provider.

However, you cannot appoint a family member, a business partner or employee, or the owner, director, manager or employee of a care home in which you are staying as a Certificate Provider.

3. Register the LPA

The LPA must be registered with the Office of the Public Guardian (OPG), which takes between 8 and 10 weeks, provided there are no mistakes in the application.

This can be done either by you, if you are able to make your own decisions, or by your attorney. If the LPA is not registered, then it is not legal and the attorney will not be able to make decisions for you.

Registering the LPA does not mean that you will no longer be able to make decisions for yourself. If you make a health and welfare LPA, your attorney will make decisions only if there will be a time where you cannot make them yourself.

However, if you make a property and financial affairs LPA, it is up to you to say whether you want your attorney to act while you still have mental capacity. This does not mean that they will act on their own, but will help you manage your finances.

A lasting power of attorney can be cancelled provided that you still have the mental capacity to make decisions. You can also remove one of your attorneys by sending a written statement to the OPG called ‘a partial deed of revocation’.

However, if you want to add a new attorney, you need to cancel the existing LPA and make a new one, following all the procedures again. Once you lose your mental capacity, you can no longer modify or cancel an LPA.

An attorney’s appointment is automatically cancelled if:

- The attorney dies;

- The attorney loses the ability to make decisions;

- The attorney becomes bankrupt;

- The marriage or civil partnership between the attorney and the donor ends (if the attorney is the attorney's wife, husband or partner).

The Court of Protection can also terminate the LPA if the attorney is not able to carry out his/her duties correctly.

If the donor dies, then the LPA automatically ends and the affairs will be looked after by executors or personal representatives, not by the attorney.

Many people consider that setting up the LPA can be done without legal help, but we consider it is best to seek legal advice, given that the LPA is such a powerful and important legal document.

If you are looking for a solicitor to guide you through the process of making a lasting power of attorney, feel free to contact us. We are here to help.