Head of Private Client, Lesley Rushton explains why setting up a Lasting Power of Attorney (LPA) will give you confidence that your affairs are in safe hands when the time comes that you are no longer able to deal with them yourselves. Her guide applies to LPAs set up in the jurisdictions of England and Wales.
We all hope that we will remain fully able to make our own decisions until we die. Unfortunately the reality is that poor mental or physical health may prevent this, and the best alternative is to authorise someone that you trust to act for you.
Setting up a Lasting & Enduring Powers of Attorney allows you to do just that. There are two types of LPAs which deal with Property and Financial affairs and Health and Welfare.
Property and Financial LPAs
These give an attorney the power to deal with your bills, bank accounts, selling your house, etc. Once registered with the Office of the Public Guardian (OPG), and with your permission, a Property and Financial LPA can be used immediately.
Health and Welfare LPAs
These give an attorney the power to make decisions about matters relating to your health such as life sustaining treatment, care and where you continue to live, if you are no longer able to look after yourself. Decisions made by your attorney in this respect may ultimately influence the overall value of your estate due to the cost of your care. Unlike Property and Financial LPAs they can only be used when you have lost the capacity to make your own decisions.
Setting up an LPA
You the ‘donor’ can only set up an LPA while you are still able to make decisions (this is known as ‘mental capacity’), so it is important not to leave it too late. You can choose more than one attorney and specify restrictions on their powers. Attorneys are obliged to maintain a duty of care to the ‘donor’, and not to benefit themselves.
Choosing and instructing attorneys
The LPA forms will ask for details of who you want to appoint as attorney(s). If you decide to have more than one attorney you can specify if you want them to act jointly or jointly and severally. If you wish them to act jointly they must work together on your behalf. The option for your attorneys to work jointly and severally is more flexible as it means that each attorney can use the LPA independently.
It is important to think carefully about who you choose to be your attorney(s), and that you talk through the responsibility and details of your wishes with them in advance so that they can prepare and be confident that they can meet your needs.
Registering an LPA
Anyone aged 18 or over can set up an LPA and you do not need to leave it until later life. LPAs must be registered with the Office of the Public Guardian (OPG) and the registration fee per LPA is currently £82.00 (as at May 2020).
Providing you still have mental capacity, you can end an LPA by formally revoking it with the Office of the Public Guardian (OPG).
When there is no LPA
The assumption by many people is, that if you lose the capacity to make your own decisions, your family will automatically be able to take responsibility for your affairs. Unfortunately this is not the case. Even if this was the case, your immediate family may not necessarily be the right people to manage your finances or make decisions about your health.
If you lose mental capacity before you have set up an LPA, someone will need to officially apply to the Court of Protection to be appointed as Deputy to act on your behalf. This can be a long and complex process and more expensive than setting up an LPA. By setting up an LPA in good time you will be saving your loved ones not only unnecessary stress but also expense.
For further information on setting up an LPA, please contact a member of our Private Client team who will be happy to help.
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