Arguably a Power of Attorney, specifically a lasting Power of Attorney, is one of the most important actions you can take in safeguarding and securing your future. If you’re considering putting one in place, we’ve provided a useful guide below to help you better understand what this means.
What is a Lasting Power of Attorney?
A Lasting Power of Attorney allows you to appoint people you trust to make decisions on your behalf. It’s a form of legal document, and there are two types – Health & Welfare and Property & Financial Affairs. In order to make an LPA you must be over the age of 18 and have mental capacity. By making an LPA you give yourself more control over who can act on your behalf, should you have an accident or suffer an illness that means you can’t make your own decisions (due to impacted mental capacity).
In order for your attorneys (the trusted people you appoint to make decisions on your behalf) to use a Lasting Power of Attorney, it must be registered with the Office of the Public Guardian (OPG). This is completed by submitting a form, which can take as many as 16 weeks to process.
Choosing your Attorneys
When making an LPA, you choose who you wish to act as your attorney. Your attorney will make decisions that they believe are in your best interests and so it’s important to appoint someone who you believe to be trustworthy and reliable.
If you appoint more than one attorney, you can appoint them jointly or on a joint and several basis. Where attorneys are appointed jointly and severally, you can elect for decisions that are important to you to be made jointly.
Your attorneys must be over the age of 18 and have mental capacity to fulfil the role of an attorney. In relation to the Property and Financial Affairs LPA, your attorney should not be bankrupt.
Types of LPAs
Property & Financial Affairs
This type of LPA allows you to grant authority to your attorney in relation to financial decisions such as paying bills or selling property. For this type of Lasting Power of Attorney, you can decide if you wish for your attorneys to be able to act whilst you still have capacity (with consent) or only when you have lost capacity.
Allowing your attorneys to act whilst you have capacity can be a useful tool and could help to safeguard against unexpected life events. For example, if you have an accident at work and are in hospital for a length of time your attorney can pay your bills, preventing you from falling into arrears.
When creating an LPA you can provide your attorneys with specific instructions and preferences illustrating how you would like your affairs to be managed. An example of these, are:
Instruction: My attorneys must consult a financial advisor before making investments over £10,000.
Preferences: I would like to only invest in ethical funds.
Health and Welfare
This type of LPA allows your attorney to make decisions relating to your care, for example what food you eat or where you should live. If permitted, it could also allow your attorneys to make decisions relating to life sustaining treatment, providing you with the assurance that someone you care for is making this important decision for you, if you are unable to make it yourself. It can only be used once you’ve lost capacity and it’s an important tool in which you can provide guidance for how you wish to live in the future when you can no longer make these decisions for yourself. Example instructions and preferences for a health and welfare LPA might be as follows:
Instruction: My attorneys must ensure I am only given Vegan food.
Preferences: I would prefer not to move from my local town.
What happens if I don’t have a registered Lasting Power of Attorney and lose capacity?
People often mistakenly believe that their ‘next of kin’ can step in and make decisions regarding property and financial affairs and health and welfare matters on their behalf if they lose capacity. This is not correct. In such circumstances, no-one, not even your spouse will have the authority to manage your sole finances or make decisions on your behalf. If you lose mental capacity and do not have a valid LPA in place, a deputy will need to be appointed by the Court of Protection and it may not be the person that you wanted to make decisions on your behalf.
The process of appointing a deputy can be stressful, drawn-out, and cost a considerable amount in legal and court fees. By preparing ahead and creating an LPA now, you will make things easier for your relatives should there come a time that you lose capacity.
The process of making an LPA is simple and secures your future by ensuring your loved ones are managing your affairs as you intended.
Should you have any questions or queries about LPAs, please contact Charlotte Keating, Partner and Head of Private Client – charlottek@prosperitylaw.com or Bethany Coward, assisting Trainee Solictor – Bethany.Coward@prosperitylaw.com
Glossary
Lasting Power of Attorney (LPA) – A legal document that allows you to appoint people you trust to make decisions on your behalf
Attorney – An individual you appoint, using an LPA, to make decisions on your behalf.
Property and Financial Affairs – A type of LPA that allows your attorney/s to make decisions for you that relate to financial decisions such as paying bills or selling property.
Health and Welfare – A type of LPA that allows your attorney/s to make decisions relating to your care
Deputy – A person appointed by the Court of Protection to make decisions for someone who lacks the mental capacity to make their own decisions.
Court of Protection – A specialised court that was established by the Mental Capacity Act 2005. It makes decisions and appoints “deputies” to make decisions on behalf of people who lack the capacity to do so for themselves.
