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What is a Lasting Power of Attorney (LPA)?
An LPA is a document that gives a person or people (the Attorneys) the power to make decisions on behalf of another person (the Donor). An LPA is made when the Donor has mental capacity, in case they lose capacity in the future.
There are two different types of LPAs.
Property & Financial Affairs
This covers decisions about the Donor’s financial affairs and property. It can be used before or after the Donor has lost capacity. An Attorney for this LPA will be able to:
Health & Welfare LPA
This covers decisions about the Donor’s personal health and welfare. It can only come into effect once the Donor has lost capacity. An Attorney for this LPA will be able to:
By making an LPA, the Donor can choose who will make decisions for them and how those decisions may be made.
If you don't make an LPA, the courts will decide who is to be appointed as a 'Deputy' and they will decide how these decisions are made.
So, why make an LPA?
What happens if you lose mental capacity?
This can be a distressing thought and is often seen as something to be considered in the future. However, LPAs must be arranged whilst you still have capacity. Capacity can be lost at any time, such as through an accident, stroke or a degenerative condition such as Alzheimer’s. Indeed, there are growing reports of people between 18-45 years suffering from mental health problems proves it can happen at any age.
Without an LPA, problems can be created if assets are held in joint names, ie. Mr & Mrs Smith. If Mr Smith loses capacity, Mrs Smith will not be able to deal with jointly owned property and access to joint accounts may be restricted.
Similar issues arise when assets are in the sole name of one party who loses capacity.
If capacity is lost with no LPA in place, family or friends will have to apply to the Court of Protection to appoint a ‘Deputy’ to make decisions on the Donor’s behalf. This is a lengthier and costlier process with the fees running into the thousands.
It can never be certain that the Court of Protection will approve an application and they are particularly reluctant to approve a Deputyship for a person’s health and welfare needs.
Choosing an Attorney
One or more people may be appointed as Attorneys. Replacement Attorneys may also be appointed to take over in the event that the original Attorneys are unable to act.
There is no limit to the number of Attorneys that can be appointed, but it is not practical for more than four to be appointed. Any person who has capacity and is 18 or over can be an Attorney.
Who to appoint is very much a personal decision for the Donor, but it should be people they trust completely.
For the Property & Financial Affairs LPA there is also the additional condition that an Attorney must not be bankrupt or subject to a debt relief order.
If more than one Attorney is appointed then the Donor must decide whether the Attorneys must act:
Most people choose their spouse or partner, acting either ‘solely’ with any children as ‘replacements’ or acting ‘jointly and severally’ alongside the children.
For a LPA to become valid it first needs to be registered with the Office of the Public Guardian (OPG).
There is a registration fee of £82 per document.
A Certificate Provider is also required. This is an independent person who certifies that at the time of signing they are aware that:
An Attorney must always act in the Donor’s best interest, and cannot take advantage of their position to benefit themselves or others.
If any person believes that an Attorney is not acting in the Donor’s best interests, they should report this to the OPG, who will investigate.
In a serious case, the OPG will refer the case to the Court of Protection who have the power to remove an Attorney or even revoke an LPA.
At Milsom Consulting, we support families through the process of establishing their LPAs and submitting them to the Office of the Public Guardian. Please contact us at firstname.lastname@example.org or 01908 985046 for further information.