Lasting Power of Attorney

What is it all about?

A lasting power of attorney (LPA) is a legal document that allows an individual (the “donor”) to appoint one or more people (the “attorneys”) to make decisions on their behalf if they lose mental capacity. When setting up an LPA, there are several key considerations to ensure it is appropriate, effective, and legally sound:

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Types of LPA

Health and Welfare LPA: This allows attorneys to make decisions about medical treatment, care, living arrangements, and other personal welfare matters. It only comes into effect when the donor loses mental capacity.
Property and Financial Affairs LPA: This allows attorneys to make decisions about finances, including managing bank accounts, paying bills, and selling property. It can be used as soon as it’s registered, even if the donor still has capacity, unless specified otherwise.
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What do you need to consider?

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1. Choosing Attorneys

  • Trustworthiness: Choose attorneys who are responsible, trustworthy, and have the donor’s best interests at heart.
  • Expertise: Attorneys should have some understanding of finances or health matters, depending on the type of LPA.
  • Relationship between attorney’s: Consider the relationship between attorneys, especially if appointing more than one, to avoid conflicts or disputes.
  • Availability and Willingness: Attorneys must be willing and able to act when necessary and be available to carry out their responsibilities.

2. Number and Decision-Making

  • Single or Multiple Attorneys: A donor can appoint more than one attorney. In that case, the donor must decide whether they will act:
    • Jointly: All attorneys must agree on every decision.
    • Jointly and Severally: Attorneys can act together or independently.
    • Jointly for Some, Severally for Others: A combination approach where certain decisions must be made jointly while others can be made independently.

3. Replacement Attorneys

Consider appointing replacement attorneys in case the original attorneys can no longer act (due to death, incapacity, or unwillingness).

4. When can your attorneys make decisions?

  • You can allow your attorneys to make decisions:
    • as soon as the LPA has been registered by the Office of the Public Guardian (OPG)
    • only when you do not have mental capacity

While you have mental capacity you will be in control of all decisions affecting you. If you choose the first option, your attorneys can only make decision on your behalf if you allow them to. They are responsible to you for any decisions you let them make.

If you choose the second option, it can make your LPA less useful. Your attorneys might be asked to prove you to not have mental capacity each time they try to use the LPA.

5. Instructions and Preferences

  • Specific Instructions: The donor can set limits or guidelines on what the attorneys can or cannot do. For example, they may include a restriction preventing the sale of a specific asset.
  • Preferences: While not legally binding, preferences express the donor’s wishes for their attorneys to consider (e.g., preferences about end-of-life care).

6. Mental Capacity Consideration

The donor must have full mental capacity when setting up the LPA, meaning they understand the implications of the document and the powers they are granting to their attorneys.

7. Certificate Provider

The donor needs a certificate provider to confirm they understand the LPA and that they are not under undue pressure. The provider must be an independent person, either a professional (e.g., solicitor or doctor) or someone who has known the donor for a long time.

8. Registration

LPAs must be registered with the Office of the Public Guardian (OPG) before they can be used. The registration process can take several weeks, so early registration is advisable.

9. Costs

  • There are fees associated with registering an LPA. Cost to register can vary depending on jurisdiction.:
    • England & Wales: £82 per document
      Those on low incomes may be entitled to exemptions.

10. Revocation and Changes

The donor can revoke an LPA as long as they have mental capacity. It’s also possible to make changes, but amendments may require creating a new LPA, especially for significant alterations like changing attorneys.

11. Safeguards Against Abuse

Consider how to protect against financial abuse by attorneys. This could involve:

  • Regular oversight by a third party.
  • Requiring attorneys to provide financial accounts to a trusted individual.
  • Including provisions for how and when financial decisions should be reported.

12. Consider Future Proofing

Plan for potential future needs, such as long-term care, to ensure the LPA covers not only current circumstances but also future contingencies.

13. Communication with Family

While not legally required, informing family members of the LPA arrangements can prevent disputes or misunderstandings later.

By carefully considering these factors, individuals can ensure that their LPAs are effective tools for safeguarding their welfare and finances in the future.