Lasting Powers of Attorney: What are they and do I need them?

There are three main types of power of attorney: General Power of Attorney, Enduring Power of Attorney and Lasting Power of Attorney (LPA).

This article is a guide to Lasting Powers of Attorney and provides information about what a Lasting Power of Attorney is, what it does and who can act. It includes some practical hints and tips for people considering making a LPA

Guide

• I already have a Will in place, do I need a Lasting Power of Attorney too?

Wills and Lasting Powers of Attorney (LPAs) are two distinctly different legal documents. A will is a document which sets out how you wish your assets to be distributed to whoever you choose after you die. For a Will to be valid, you must have the capacity to make it and it must be validly signed by you.  Your will only takes effect after you die. Further information can be found in our guide to Wills.

A Lasting Power of Attorney is a document that allows you (the donor) to appoint one or more people to help you make decisions, or make decisions on your behalf, when you are unable to do so yourself.  You must have the required capacity to make a Lasting Power of Attorney.

When you die, your LPA immediately come to an end and your attorneys will no longer be able to make decisions and carry out transactions on your behalf. The executor(s) of your Will must then start the process of administering your estate in accordance with your wishes.

A Lasting Power of Attorney does not give your attorneys the power to change your Will or make a Will on your behalf. For this to happen, your attorney would need to make an application to the Court of Protection. For further information about the Court of Protection, click here.

• I didn’t think I needed a Lasting Power of Attorney until I get older

Sadly, people can become physically and / or mentally incapacitated at any stage of their lives. It is when these situations arise that having LPAs in place can take some of the stress away from loved ones by them being able to help you make decisions or make them for you on your behalf.

• I already have an Enduring Power of Attorney in place, do I now need a Lasting Power of Attorney?

Enduring Powers of Attorney (EPAs) remain effective providing they were made and validly signed before the deadline in October 2007. However, EPAs are more restrictive than Lasting Powers of Attorney (LPAs) and careful consideration should be given as to whether an EPA will still meet your requirements considering the passage of time and the introduction of LPAs.

Under an EPA, your attorneys can only make decisions regarding your property and financial affairs and not your health and welfare. Further, unlike an LPA, there was no option in an EPA to appoint a replacement attorney to ‘step in’ should anything happen to one or all your attorneys appointed in the first instance.

When making an EPA, many people chose to place a restriction upon when it could be used. For example, a common restriction included was ‘this EPA can only be used once I have lost mental capacity’. Whilst considered to be a good safeguard, this restriction rendered the EPA impractical where a person was to become physically but not mentally unable to manage their own finances. For example, if a person was hospitalised for a long period of time but still had mental capacity, their attorneys would not be able to act for them because of the restriction in the EPA. 

There are a number of onerous notification requirements during the registration of an EPA including an extensive list of people that need to be notified and told about the registration of the EPA. This is now optional when registering a LPA and you do not need to tell anyone when you register the LPA.

If you have an EPA in place, we can review it for free and advise whether you need to make a LPA.

• What types of Lasting Power of Attorney are there?

There are two types of Lasting Powers of Attorney. The first relates to your property and financial affairs for example, help with paying bills, managing bank accounts and selling your home. The second relates to your health and welfare for example, decisions about where you should live and end of life treatment.

• Do I need both types of Lasting Powers of Attorney?

There is a common misconception that as a Property and Financial Affairs LPA is the more popular of the two types, it must therefore be the most important. It is entirely your choice whether to make either or both LPA’s. However, it is advisable to make both Lasting Powers of Attorney to cover as many eventualities as possible.

• Do I still need a Lasting Power of Attorney for Health and Welfare if I have a Living Will?

It is advisable to make a Health and Welfare LPA as living wills only cover the refusal of specific treatments. However, if you sign a living will after you have made a Health and Welfare LPA then the living will is binding and takes precedence.

A Health and Welfare LPA is much more flexible than a living will and enables your attorneys to make a wide range of decisions on your behalf including where you should live and what medical care you should receive.

When creating a Health and Welfare Lasting Power of Attorney, you can choose if you would like your attorneys to have the authority to refuse or consent to life sustaining treatment.

• What happens if I lose mental capacity and don’t have either LPA in place?

In the absence of a Property and Financial Affairs Lasting Power of Attorney, an application will need to be made to the Court of Protection for a deputy to be appointed. This can be a lengthy and costly process.

In the absence of a Health and Welfare LPA, again, an application will need to be made to the Court of Protection for a deputy to be appointed. However, applications to become a deputy to make general decisions about a person health and welfare are often rejected. This is because the Court of Protection prefers to make an order in respect of specific decisions that need to be made.

Without a Health and Welfare LPA, any decisions will be made by social services and medical professionals. It does not matter if you have a next of kin, they will not have the final say.

Further information about what to do if you haven’t got a Power of Attorney in place can be found in our Court of Protection guide.

Practical Points

• Who can I appoint to act as my attorneys?

Your chosen attorneys must be 18 or over and have the mental capacity to make decisions on your behalf.

It is advisable to appoint attorneys who you know would look after your finances well and who you can trust will make decisions in your best interests. It is also important that your chosen attorneys are able and happy to carry out the role.

Examples of who may act as your attorney include your spouse, children, friends and a professional such as a Solicitor. Your financial adviser can act as an attorney but they may refuse if they consider it to be a conflict of interest to also manage your finances.

• I only wish to appoint my Husband or Wife to act as my attorney – is this possible?

It is possible to only appoint your spouse to act as your attorney. However, should you not appoint a replacement attorney to ‘step in’ if your spouse is unable to act for you then your LPA will come to an end. As a result you will need to make a new LPA providing you have the mental capacity to do so.

There are different ways in which you can appoint your attorneys and replacement attorneys to act for you. A brief summary of the different ways they can act is found here. We can advise you on the most appropriate way to appoint your attorneys depending on your circumstances.

• When can my attorneys act for me under a Lasting Power of Attorney?

An attorney can act for you under a Property and Financial Affairs LPA in the following circumstances:

1. Whilst you have mental capacity but only with your consent; and
2. If you lose the mental capacity to make decisions for yourself.

An attorney can only act for you under a Health and Welfare LPA once you are no longer able to make decisions for yourself.

• If I lose capacity to make my own decisions, what safeguards are in place to ensure that my attorneys are acting in my best interests?

Generally speaking, attorneys are not monitored when carrying out their duties. However, they are accountable to the Office of the Public Guardian for their actions. If anyone suspects that an attorney is acting out of the scope of their duties then that person can report the attorney to the Office of the Public Guardian who will investigate their concerns. In serious cases such as theft and fraud, it will be necessary to involve the police.

For peace of mind, we can offer an annual checking service for our clients who have made a Property and Financial Affairs LPA. This service involves us reviewing your financial affairs such as your bank accounts to check that your finances are being managed correctly. The ability for us to do this must be stipulated in the LPA.

• How will my attorneys know what I would want to happen in certain situations?

You can include preferences in your LPAs of things that you would like to happen. Preferences act as guidance to your attorneys and are not legal binding upon them.

You can also include instructions in your LPAs. These instructions will be legally binding on your attorneys and must be followed. Certain instructions can create a problem with the LPA registration process and so it is important that you seek legal advice about the wording of any instructions you wish to include in your LPAs.

The difficulty with including preferences and instructions in your LPA is where your wishes change over time. Once your LPA has been registered, it cannot be changed and you will need to make a new one. This will not be possible if you have lost mental capacity.

• What is a certificate provider and why do I need one?

A certificate provider is someone who signs your LPA to confirm that they have discussed the LPA with you, that you have understood it and you have not been pressured into making it.  Your certificate provider can be someone who has either:

• known you for two years including a friend, neighbour or colleague; or
• someone with the relevant professional skills such a Doctor or a Solicitor.

There are important rules around who can and cannot act as your certificate provider. It is essential that you seek advice regarding who can act as your certificate provider before asking them.

• Who can act as mine and my attorneys’ witnesses when signing the Lasting Power of Attorney?

Your signature must be witnessed by an impartial person who is 18 or over. Your signature cannot be witnessed by any of your attorneys.

Your attorneys can witness each other’s signatures but not yours.

Your certificate provider can witness yours and your attorneys’ signatures.

The donor, attorneys and certificate provider can be present at the same time during the signing process to save time. Alternatively, all parties can sign on different days and this is sometimes more practical. However, it is important to ensure that the LPA is signed correctly as there is a strict signing order.

• When can my attorneys start acting on my behalf?

Lasting Powers of Attorney can only be used once they have been registered by the Office of the Public Guardian. It takes approximately 10 weeks for a LPA to be registered by the Office of the Public Guardian and it cannot be used until the registration process is complete.

• I have a holiday home abroad. Will my Lasting Power of Attorney cover my holiday home?

Each country has its own requirements as to whether it recognises foreign Lasting Powers of Attorney. There isn’t presently a standard international LPA that is universally recognised. Some countries do recognise LPAs created by English and Welsh law (Scotland and Northern Ireland have their own legal system) but they may require it to be confirmed by the local court before the LPA is treated as valid. If they do not recognise them, then a new power of attorney will need to be created in that country. However, it is important to remember that many countries do not have an equivalent to a power of attorney.

If you own foreign assets or regularly spend time abroad, it is important to take legal advice to make sure you are completely protected. Paul Clark is an expert in cross border and international matters, and he will be able to use his extensive contacts with the international legal community to ensure you receive the right advice.

• How much does it cost to make a Lasting Power of Attorney?

The Office of the Public Guardian charges £82 for registering each LPA. You might be exempt or eligible for a reduction in the registration fees depending on your financial circumstances. Details of our fees for making and registering LPAs can be found here.

It is important to seek legal advice when making a LPA to talk through your options because if a LPA is incorrectly completed, it will be rejected by the Office of the Public Guardian and you will likely incur additional costs.

If you would like to discuss making a Lasting Power of Attorney, then please call Paul Clark on 07388 830 864 or Pamela Murphy on 07708 046 410.

We have office locations in Sandbach, Congleton, Knutsford, Wilmslow and Manchester.   Alternatively, we can visit you in the comfort of your own home for no additional cost. During the current Coronavirus pandemic we are also available for meetings by telephone and video conferencing such as Facetime, WhatsApp and Zoom.