Lasting Powers of Attorney
What are LPAs and why do you need one?
Lasting Powers of Attorney (known as LPAs) are the legal documents that enable you to appoint one or more individuals to make decisions on your behalf when you become unable to make those decisions for yourself, for example if you need someone else to make decisions for you as a consequence of an accident, illness or old age. LPAs came into force in England and Wales on 1 October 2007 as part of an act designed to protect vulnerable people called the Mental Capacity Act 2005.
LPA basics:
The person making the appointment and nominating another person or people to act for them is called the ‘donor’ and the individuals chosen to be able to act on behalf of the donor are called the ‘attorneys’.
There are two types of LPAs:
1. LPAs for financial decisions – Finance LPAs give attorneys the ability to make decisions on property and financial affairs issues, such as running bank and savings accounts, making or selling investments, paying bills and buying or selling your home.
2. LPAs for health and care decisions – Welfare LPAs give attorneys the ability to make decisions on health and welfare issues, such as the type of healthcare and medical treatment you receive, including life sustaining treatment, where you live and day-to-day matters such as your diet and daily routine.
It is important to note that LPAs must be prepared using the current forms issued by the OPG and LPAs cannot be used by the attorneys unless they are registered with the Office of the Public Guardian (OPG). It takes up to 20 weeks to register an LPA, and this can be longer if there are mistakes in the application or individuals are slow to sign the document. Therefore, it is vital that LPAs are prepared when people are healthy and young in order to avoid what can be a lengthy registration process or the unfortunate event of when a decision is needed in an emergency and there is no LPA available to be used immediately.
When can attorneys use LPAs?
All valid and registered LPAs can be used by attorneys if the donor has no longer got the requisite mental capacity to make the relevant decisions. However, the situation is different if the donor retains the mental capacity to make their own decisions.
Whether you can use an LPA when the donor still has the requisite mental capacity to make those decisions themselves depends on which LPA is being used. It is important to note this distinction, which is as follows:
Welfare: No-one can make health and welfare decisions for a donor if the donor is able to make those decisions themselves, instead attorneys must help the donor to make their own welfare decisions in whatever way possible.
Finances: If a donor has capacity, attorneys can make finance decisions only if the donor specifically authorises the attorneys to act on their behalf. The most common example of when a Finance LPA might be used whilst the donor still has mental capacity is if the donor is physically unable to make the decision (e.g.: if someone is deaf or blind and needs and/ or wants the attorney to assist them practically with their finances even though there is no change in their mental capacity).
Core Principles of the Mental Capacity Act
When acting under a power of attorney, attorneys must always act in the donor’s best interest and attorneys must follow the 5 core principles of the Mental Capacity Act which are:
Attorneys must assume that donors can make their own decisions unless it is established that the donor cannot do so.
Attorneys must help the donor to make as many of their own decisions as they can. The attorneys must take all practical steps to help the donor to make a decision and attorneys can only treat a donor as unable to make a decision if they have not succeeded in helping the donor through those steps.
Attorneys must not treat a donor as unable to make a decision simply because the donor makes an unwise decision.
Attorneys must act and make decisions in the donor’s best interests.
Before attorneys make a decision or act for the donor, the attorneys must consider whether they can make the decision or act in a way that is less restrictive of the donor’s rights and freedom but still achieve the same purpose.
Enduring Powers of Attorney
Before LPAs came into force the ‘old’ system of powers of attorney was ‘Enduring Powers of Attorney’ (known as EPAs). EPAs only dealt with finances, not health and welfare matters. EPAs were replaced by Finance LPAs in 2007. If you have a validly signed EPA then, despite the fact that it maybe considered an ‘old’ document, that EPA can still be used.
However, there are reasons why EPA donors might want to create new LPAs. Providing you have the relevant mental capacity, it is recommended that you consider preparing new LPAs, especially if:
1. You want to appoint different attorneys (e.g.: if the existing attorneys have died or are no longer willing to act).
2. You want someone to make health and welfare decisions for you (EPAs only cover financial and property decisions, they do not apply to welfare decisions).
3. You wish to include more directions and wishes in your Powers of Attorney directing how your attorneys will act.
Ordinary Powers of Attorney
Ordinary Powers of Attorney (OPA) are not used often because they are not valid if the donor (the person making the OPA) loses mental capacity. Nonetheless, OPAs can be useful in narrow circumstances, such as if someone is abroad when an important transaction needs to take place or if a transaction needs to be carried out whilst you are waiting for the LPAs to be registered.
Taking expert legal advice
It is vital that you comply with all the rules surrounding the creation of powers of attorney. Individuals can prepare LPAs themselves, however, professional bodies such as Solicitors for the Elderly strongly recommended that you take independent legal advice when preparing any of the above documents. From my previous experience working in this area of law, I saw the distress caused by situations where individuals had tried to use an invalid power of attorney at a critical moment. As a consequence, I believe that in an emergency it is reassuring to know that your legal paperwork is correct, you do not want the stress of realising that you have mistakenly completed the forms incorrectly.
My final thoughts…
• Everyone should consider LPAs – there is a chance that all of us may at some point in the future lose capacity to make decisions and, if that time comes, a legal document will be needed to specify who can make decisions on our behalf.
• Consider new LPAs, even if you have an old Power of Attorney – if you have an old power of attorney document you can take it to a Private Client solicitor who can let you know whether it needs to be updated.
• LPAs must be signed by the relevant parties in the correct order – if you don’t sign LPAs correctly, then it is likely the appointment will not be valid - so if you are unsure seek expert legal advice.
• LPAs should be registered ASAP – due to the mandatory statutory notice period, it takes a minimum of 6 to 8 weeks to register LPAs, and significantly longer if people take their time signing the document, so LPAs are usually registered as soon as they are signed by all parties.
• Use a professional – not only does a professional know these forms inside and out, but they can ask questions and ensure that you truly know what you are signing.
If you would not cut your hair yourself, why would you think that you know enough to prepare your own legal documents?
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