A Power of Attorney is a legal document where one person, the donor, gives another person the right to make decisions on their behalf. It gives you protection regarding your financial and medical affairs by allowing your ‘attorney’ to act on your behalf once you have lost your mental capacity.
Your ‘attorney’ need not be a qualified legal expert, it can merely be a friend, your children (over 18), partner or colleague as long as they have mental capacity.
Many advisors, including Martin Lewis (MoneySavingExpert), believe Power of Attorney is more important than a Will because if you are deceased, your assets are left to your beneficiaries, however, losing your mental capacity means you are now unable to look after yourself, including your medical and financial decisions, but still need decision-making regarding care and finances. Do not always assume your family can access your finances. They need to apply to the Court of Protection or equivalent, which is costly, tedious and causes problems for all involved. A Power of Attorney is a critical step in ensuring you receive thorough care and support in a critical moment of your life. You get to decide who will make these decisions for you.
An Enduring Power of Attorney (EPA) is a document appointing an Attorney to manage the property and financial affairs of the Donor. If the Donor becomes mentally incapacitated, an EPA must be registered before it can be used, or if it is already in use, before it can continue to be used. After October 2007, EPAs can no longer be created, those created before, either registered or unregistered, can still be used today. Lasting Power of Attorney (LPA) has since replaced EPAs, which only allowed people to act on their behalf regarding property and financial matters, whereas the LPA offers more protection and extra options. Someone who has previously made an EPA and still holds the mental capacity can replace their EPA with a property and affairs LPA or can keep the existing EPA. The Lasting Power of Attorney now allows an attorney to make personal welfare decisions on your behalf, along with property and financial decisions.
The registration of an EPA means the Attorney now takes full control and responsibility from the Donor for managing their financial affairs. The Donor can no longer manage their affairs anymore unless the Court confirms the revocation of the EPA by signing a ‘Deed of Revocation’. Once the Donor dies, the EPA automatically comes to an end and the Attorney must send the original EPA along with the death certificate to the OPG as soon as possible. This can be problematic if the Donor suddenly believes he has the capability to manage his own affairs again.
The registration of a Lasting Power of Attorney is somewhat different than the EPA. The LPA introduced protections under health and care decision, and there are now two forms, LP1F and LP1H, that need to be filled in if you wish to have your Attorney manage your financial and health matters. LP1F deals with the financial aspect, you can choose when filling out the form if you would like your Attorney to take control as soon as the LPA is registered or only when you can no longer make decisions yourself. If you wish to have different Attorneys manage personal and business finances, fill in two LP1F forms. LP1H refers to health and care decisions, the key difference between the LPA and EPA is that under an LPA you can still act on your health affairs, or you can have your Attorney act. You are allowed to appoint a replacement Attorney to step in should one of your original Attorneys no longer be able to make decisions on your behalf, without a replacement, you may only have one Attorney who is now unable to make decisions, meaning your LPA will no longer work.
Section 8 gives the Donor more protection than the EPA, which states your Attorney must always act in your best interests to help you make all or part of a decision, whilst being guided by your cultural, moral or religious beliefs and values. To ensure this, Attorneys can find out your preferences and views written in the LPA or elsewhere, avoiding restricting your rights and consulting family and friends, who may understand these aspects.
You are unable to amend your LPA once it is signed and will have to make a new one should you wish to make any changes. You must sign your LPA before anyone else and have an independent (LP12 Make and register your lasting power of attorney: a guide) witness sign straight after you. You must also receive a signature from a certificate provider, a person you’ve known well for at least 2 years, someone with professional skills such as a lawyer who can judge you understand what you are doing and are not being forced to make the LPA. Your Attorney/s and replacements then sign, and your LPA is ready to be registered.
If there are mistakes, OPG can’t register the LPA and the LPA can’t be used. Someone will have to apply to the Court of Protection to get the power to make decisions on the donor’s behalf or get a declaration that the LPA can be treated as valid. This can be a long process and can cost a lot more than an LPA. When registering your LPA you must send these forms, with the signature of the Attorney registering the LPA, along with a cheque for £82 made payable to the Office of the Public Guardian.
This may sound like a never-ending process, however, the OPG has published an easy step-by-step guide on GOV.UK on how to fill in and register your LPA. This is a vital step in ensuring your financial and medical affairs are taken care of with your best wishes in mind. For the avoidance of any problems in making or registering an LPA, we recommend you see a solicitor to get advice.
For help and guidance, feel free to get in touch with Head of Private Client (Liverpool), John Paul Dennis on JPD@ProsperityLaw.com or give us a call on 0151 909 8657
This blog was written and prepared by Jack Donohue, University of Liverpool Undergraduate
