A Lasting Power of Attorney is a legal document giving someone of your choosing the authority to make financial or healthcare decisions on your behalf.
In the event that you become unable to manage your own affairs, your attorney will be able to step in and deal with matters for you.
What is a Lasting Power of Attorney (LPA)?
An LPA is a legal document by which you can give one or more attorneys of your choosing the power to make decisions on your behalf and deal with the administration of your affairs.
The document must be executed while you are mentally competent and can be stored until such time as it is needed.
You can make two different types of LPA, one in respect of your financial matters and one in respect of decisions relating to your health and welfare.
A property and financial affairs LPA gives your attorney authorisation to manage your bank accounts, to pay bills, collect your pension and sell your house, although the powers it confers can be limited if you choose.
A health and welfare LPA allows your attorney to make decisions regarding where you will live, what medical treatment you will have and whether you will be given life-sustaining treatment.
When can a Lasting Power of Attorney be used?
A property and financial affairs LPA can be used as soon as it has been registered with the Court of Protection. This allows someone who may struggle physically with going to the bank, for example, to give their attorney the authority to deal with this on their behalf.
It is usually the case that without an LPA, no-one can access a bank account or carry out financial transactions on behalf of someone else. An LPA gives you the flexibility to have an attorney who can step in if needed.
A health and welfare LPA can only be used once the person who has signed it has lost the mental capacity to make their own decisions.
There is a two-stage test to ascertain whether a person has mental capacity:
- Does the person have an impairment of, or a disturbance in the functioning of their mind or brain?
- Does the impairment or disturbance mean that the person is unable to make a specific decision when they need to.
By consulting with a solicitor before making an LPA there is less chance of any problems later on and they will also be able to sign the LPA as a certificate provider, ie. someone who can confirm you have understood the implications of the LPA and you have not been put under any pressure to sign it.
Who should I appoint as my attorney?
You should choose someone you trust implicitly as they will potentially have control over all of your affairs. Your attorney must be aged 18 or over and may not be bankrupt.
You can appoint as many attorneys as you wish. Ideally, you should think about either appointing two attorneys or, if you only have one, then name a replacement in case your first choice is unable to act.
You can select whether your attorneys can act separately or whether they both have to sign documentation to authorise transactions. In reality, it may be easier for them to each have the power to sign individually, but this is something for you to consider in your unique circumstances.
It is often advisable to choose an attorney who is younger than you, as they are more likely to have the ability to deal with what could be extensive administration on your behalf. Someone of your own age may possibly struggle to take on the job when the time comes.
What decisions can my attorney make on my behalf?
In respect of a financial LPA, if you give your attorney general power to act on your behalf, they will be able to do everything that you could have done yourself. This includes opening, closing and operating bank accounts on your behalf, paying bills, investing money and buying or selling property.
You can limit this type of LPA if you choose so that your attorney only has selected powers.
A health and welfare LPA allows your attorney to decide where you will live, how you will spend your time, what day-to-day care you will receive, to include what you will wear and what you will eat, what medical treatment you will be given and who you will see.
You can choose to give your attorney permission to make decisions about whether or not you receive life-sustaining treatment.
What decisions cannot be made by my attorney?
Your attorneys cannot make any decisions on your behalf after your death unless they are appointed as your executor in your Will.
They can make some gifts on your behalf, but only where these are reasonable and in proportion to the size of your estate. The gifts must customary or seasonal, such as birthday or Christmas gifts. Any substantial gift will need the consent of the Court of Protection.
Your attorneys cannot change your Will unless they apply to the Court of Protection to make a statutory Will. They are not allowed to access or view your Will.
They cannot delegate their powers or agree to any restriction on your liberty. They are not able to refuse life-sustaining treatment for you unless you have specifically given them this power.
What will happen if I have not made a Lasting Power of Attorney?
If you lose the mental capacity to make your own decisions, then it could be very difficult for your family to deal with your affairs. Next of kin do not have the right to operate your bank account, unless they are a joint account holder with you, and they will not be able to access your funds to pay bills or be able to make any decisions about how to care for you or manage your finances.
An application will need to be made to the Court of Protection for someone to be appointed as your deputy. This is substantially more expensive than putting an LPA in place and can be a lengthy procedure. While they are waiting for the Court to process the application, they will not officially be able to help you.
Being a deputy also involves ongoing expenses as the Court of Protection will require annual reports of the deputy’s activities, to include details of the amounts spent on your behalf.
There is also a risk that the person appointed as your deputy will not be the person you would have chosen yourself.
Putting an LPA in place will give you the peace of mind of knowing that your chosen attorney(s) can step in and help you without difficulty if and when you need them.
At Elm Legal Services our Wills and Trusts experts can discuss your situation with you and draw up an LPA on your behalf. We can answer any questions you may have about putting an attorney in place and ensure that you fully understand the role that they will take on and that you are happy with your choices.
If you would like to speak to one of our specialist Wills and Probate lawyers, call us now on 0117 952 0698 or Contact Us and we will be happy to explain the options available to you without obligation.