What is an LPA?
This stands for “Lasting Power of Attorney”. The LPA is a legal document whereby a Donor (the person who makes the LPA) names an attorney or attorneys to make decisions for the Donor, either (in the case of a Property and Financial Affairs LPA) from the date of the registration of the LPA (if this is what the Donor wants) or from the dale the Donor loses capacity and cannot make decisions for himself or herself (in the case of a Health and Welfare LPA).
Is there just one LPA document that covers both financial and health decisions?
No, there are 2 types of LPA, namely “Property and Financial Affairs” and “Health and Welfare”.
Do I have to do both types of LPA?
No, it is a matter for yourself to decide upon. Some people prefer to do both types and this then involves 2 forms and 2 registration fees, but this does give the Donor peace of mind that an appropriate Attorney has been put in place, be ii for health or financial decisions on their behalf, should the need arise in the future. Most people are concerned about how their finances are going to be dealt with in the event of their incapacity, and accordingly just over 2/3 of all LPA’s registered at the Office of the Public Guardian are Property and Finance LPA’s.
Do I really need an LPA?
Hopefully, you would never need an LPA but this does mean that you would have to retain your capacity until the day you die. The benefit of an LPA is that you are forward planning for the eventuality of you losing capacity (which can happen in many ways) so that when that day arrives, you have an Attorney in place who can then immediately deal with your financial affairs or make decisions on your behalf about your medical treatment. Many of our clients at Kirkham Legal liken this position to taking out an insurance policy – they are correct in that you are taking out protection now to cover the possibility of something happening in the future, and the cost of preparing and registering the LPA is akin to paying a one-off insurance premium. We at Kirkham Legal advise all our clients to prepare either one or both types of LPA, depending on your personal circumstances.
What happens if I don’t have an LPA and I lose capacity?
Sadly, this is a common occurrence and causes considerable problems to the family and friends of the person who loses capacity. If that person does not have capacity, then strictly speaking no-one has legal authority to deal with their affairs until a Deputy is appointed by the Court of Protection. Such an application can take upto 6 months to complete and incur substantial fees and costs. In the meantime, the person who has lost capacity is in limbo as no-one can deal with their finances on their behalf.
If I lose capacity, can someone (for example my spouse or child) prepare an LPA on my behalf?
Unfortunately, no. The Donor must have mental capacity to prepare an LPA, which means they must have the ability to make their own decisions.
What is “mental capacity”?
The Mental Capacity Act 2005 sets out the rules for people without mental capacity. A person lacks capacity if, on the balance of probabilities, the person has an impairment of or a disturbance in the functioning of the mind or the brain and the effect of this is that the person is unable to make the decision at the time the decision needs to me made. A person is unable to make a decision for himself or herself in relation to a given matter if, with appropriate assistance as necessary, the person is unable to understand the information relevant to the decision, to retain that information, to use or weigh that information as part of the process of making the decision or to communicate his or her decision by whatever means. A person should not be treated as unable to make a decision even if the relevant information can only be retained for a short period of time.
In practice, this situation often arises when family members notice the early onset of dementia, and then start to give consideration as to how to deal with money and health matters for their loved one going forward. We at Kirkham Legal are well trained to make this assessment, but in the event of a significant doubt, a medical opinion should be obtained. The family usually bring the person into our office (although we are quite happy to do home visits) and once introduction has been made, we will see the person on their own to assess their capacity. If the person doesn’t understand:-
(a) What is an LPA;
(b) Why he or she wants to make the power of attorney;
(c) Who he or she is appointing as an attorney;
(d) Why he or she has chosen that person as an attorney;
(e) What powers are being given to the attorney?
then that person does not have capacity to prepare an LPA. Sadly, in our experience, people often leave it too late to prepare an LPA as the dementia has progressed to a stage that capacity has been lost, and the only way to then progress would be to make an application to the Court of Protection.
I already have an “Enduring Power of Attorney” (an EPA), so do I need an LPA?
LPA’s replaced EPA’s on the 1/10/07. EPA’s signed prior to that date are still valid. Once signed by the Donor and the Attorney, the EPA could be used immediately but once capacity was lost it was then necessary to register the EPA before you could continue to act. The new LPA regime is more vigorous, requiring the LPA to be registered with the Office of The Public Guardian before being used, but once registered your Attorney could act and continue to do so (without further notification or registration) once the Donor has lost capacity. The EPA system also did not cover health decisions that the new “Health and Welfare” LPA provides for. It is therefore a matter for you to decide if you want to upgrade your EPA into one or both forms of LPA. We will quite happily discuss this with you before you decide
What is an Attorney?
This is the person the Donor picks to make decisions for them. Attorneys do not need legal training but they do need to be trustworthy and reliable. If you are appointing an Attorney to deal with money matters for you, we would also suggest that the Attorney should be experienced when it comes to dealing with money.
An Attorney must be aged over 18, have mental capacity and must also not be bankrupt (for a Property and Financial Affairs LPA).
Can I appoint my spouse to be my Attorney?
Yes you can. This is a common appointment between a husband and a wife. If however you feel that your spouse could not cope (for whatever reason) in dealing with matters on their own, you could appoint another Attorney or Attorneys to act with, or instead of your spouse in the LPA document.
What happens if my Attorney dies or is otherwise unable or unwilling to act?
Obviously in that situation that chosen Attorney cannot help you under the terms of your LPA. It is for this reason that we advise that you give consideration to the appointment of more than one Attorney, or in default to name “Replacement Attorneys” in your LPA, who then act like substitutes and come into play when needed. The LPA form makes provision for this eventuality.
How may Attorneys should I appoint?
That is a matter for you, but we would advise that at least two trusted Attorneys (or Replacement Attorneys) are used. We often see parents who name all their children to be attorneys or replacements, and this is fine as long as consideration is given as to how they are to make decisions in the future. Attorneys can be told to make decisions “Jointly” which means ALL your Attorneys have to be in agreement to a particular decision, or “Jointly and Severally” which means each Attorney can make binding decisions themselves. Most parents choose the latter option, to cover the possibility of children moving away or being unable to act in the future for any other reason. We have even come across instructions where parents have omitted one child from an LPA simply because they knew that that child was not good at handling money and making wise decisions.
Who should be my Attorney?
The simple answer is that you should appoint a person or persons that you trust implicitly. In rare circumstances, a Donor may not have anyone who fits this category and in such a case you could appoint a Solicitor as a Professional Attorney, but they would then charge you for the work undertaken on your behalf.
What does an Attorney do?
It depends on the type of LPA. In a Health and Welfare LPA, your attorney. will follow your wishes as stated in the document (and in particular your decision as to consenting to or refusing life saving treatment) and will speak to the medical professionals on your behalf, and this appointment only takes effect once you have lost capacity, as if you can still have capacity you will be able to make your feelings known yourself. The Attorney can also usually decide where the Donor should live, what diet and dress is provided, arrange medical and dental appointments and deal with community care services.
In a Property and Financial Affairs LPA, the Donor can leave specific instructions to their attorney, or simply appoint the Attorney to deal with all financial matters on their behalf. Typical tasks include dealing with bank, building society and ISA accounts, claiming pensions and benefits, dealing with tax matters, paying household or care bills, making or selling investments, buying or selling your home or other property, buying health equipment, repairing or maintaining your home, and even making gifts on your behalf. Another important decision that the Attorney has to make in a Property and Financial Affairs LPA is when the appointment is to take effect – immediately it is registered or only when capacity is lost. We often deal with clients who have clear mental capacity, but their movement is restricted, so they prepare an LPA so as to allow their trusted Attorney to deal with their finances on a day-to-day practical basis. This does not mean that the Donor is surrendering their finances to their Attorney; it simply means they are allowing their Attorney to access their finances on their behalf, and this arrangement often works well in practice.
Does an Attorney only act for me when I have lost capacity?
It depends on the type of LPA. In a Health and Welfare LPA, the Attorney can only act when the Donor has lost capacity, as up until that time the Donor can and should make their own health decisions. In a Property and Financial Affairs LPA, the Donor can choose when the Attorney can act, either immediately upon the LPA being registered with the Office of Public Guardian or upon capacity being lost. In practice, but this does depend on your personal wishes, most people choose the former option, so as to avoid the delay involved in the LPA being registered once capacity has been lost.
What responsibilities does an Attorney have?
When an Attorney makes decisions for the Donor, every decision must be in the Donor’s best interests. Attorneys must not make a decision to suit themselves or other people, as the decision must be right for the Donor. The Attorney must follow any instructions as set out in the LPA, and have regard to and try to follow any preferences the Donor has included in the LPA. The Attorney should consider the values and wishes of the Donor, think about what the Donor would have decided if they could and should not make assumptions based on the Donor’s age, gender, ethnic background, sexuality, behaviour or health. Every decision should be based upon what the Donor would want, and if there is a chance that the Donor could regain capacity consideration should be given to the Attorney delaying a decision.
An Attorney could also refer to friends and family of the Donor when making day-to-day decisions, but if the Attorney is making a big financial decision (eg whether to sell the Donor’s house) then the Attorney would be well advised to consult a Solicitor, and certainly the Donor if he or she still has capacity.
It is important to note that a financial Attorney cannot make decisions relating to the Donor’s health, unless the Donor has also done a Health and Welfare LPA.
Does an Attorney get paid?
An Attorney cannot claim fees for time spent acting as an Attorney unless it is specifically stated in the LPA, but this generally is not a problem as most Attorneys are friends or family who does not expect to be paid. Professional Attorneys, such as Solicitors, will expect to be paid for the time spent in dealing with your affairs.
An Attorney can, however, claim out-of-pocket expenses, as long as they are proportionate to the size of the Donor’s estate and relate to the actual work undertaken by the Attorney in carrying out their duties. Common examples are the cost of travel, phone calls, and postage stamps.
It is also acceptable for your Attorney to employ professionals such as solicitors, accountants and regulated financial advisers to help manage the Donor’s affairs, as long as the instructions are reasonable, proportionate and not something the Attorney could have easily done themselves. If the Attorney wishes to make a “big” decision, such as selling the Donor’s house, then it is highly advisable for the Attorney to seek legal advice so as to ensure the Attorney is acting correctly and within the powers afforded under the terms of the LPA.
Can an Attorney delegate their powers to another person?
The simple answer is no. The Attorney can seek advice, but cannot delegate decision making, as the appointment as Attorney is personal to the chosen Attorney. The Attorney can, however, disclaim the attorneyship if they no longer want to carry out the role.
What if my Attorney gets into a dispute over his or her role?
Disputes can occur and, if they do, we would strongly suggest legal advice is sought. Ultimately, contact can be made with the Office of The Public Guardian for advice, who do have the power to intervene if appropriate.
What happens if my Attorney abuses their position and I am in no state to challenge them?
Contact should be made to the Office of The Public Guardian by any person who suspects that abuse or exploitation is taking place. One of the roles of the Office of The Public Guardian is to·protect people without capacity. Abuse can be deliberate or because an Attorney doesn’t know how to act correctly. The Office of The Public Guardian can arrange for a Court of Protection visitor to meet the Attorney to address any concerns about how they are acting as an attorney. The visitor will make whatever enquiries and meet whoever they see fit to complete their investigation, and an Attorney must comply with the visitor and provide them with information. The – Office of The Public Guardian can and will refer serious cases of possible abuse to the court which may revoke the LPA.
If the Attorney does not carry out their duties as a Financial Attorney properly, they may be ordered to refund the Donor for losses suffered, and the Office of The Public Guardian can refer suspected fraud cases to the police.
When does my Attorney stop acting for me?
The role ends when:-
(a) The Donor dies, in which case an original death certificate, the original LPA and any certified copies should be sent to the Office of The Public Guardian;
(b) The Attorney chooses to stop, in which case they will have to send a Disclaimer to the Office of The Public Guardian;
(c) The Attorney becomes bankrupt or subject to a Debt Relief Order;
(d) The Attorney is the Donor’s spouse or civil partner and they divorce or separate (unless the LPA provides otherwise);
(e) The Attorney loses mental capacity.
What is the procedure for an LPA?
The first step is to complete the LPA form, and there are separate forms for Health and Welfare and Property and Financial Affairs decisions. You need to choose your Attorney and possible Replacement Attorneys and also a person called a “Certificate Provider” who certifies on the form that you have mental capacity and that you are not being pressurised into making an LPA. The Certificate Provider can be your Solicitor (and we at Kirkham Legal are more than happy to undertake this role for you), your Doctor or someone unrelated to you that has known you for more than 2 years. The form needs to be signed and witnessed by the Donor, the Attorney(s) and the Certificate Provider before being sent to the Office of The Public Guardian office in Birmingham, together with the application fee (currently £82.00 per LPA document per person), for registration purposes. The Office of The Public Guardian then checks the forms and if they are correctly completed will confirm this in writing, before eventually returning the duly registered LPA to you. You should keep the registered LPA in a safe place for future use. We at Kirkham’s suggest that you lodge the original with us (for example together with your will and deeds), free of charge, and we will provide you with “Certified Copies” of the original which you can then use with banks, hospitals etc. as though they were the original document. We do not charge an additional fee for certified copies, in contrast to many other solicitors, as this is included in our quoted fees. You can then give each of your Attorneys a certified copy of your LPA for future use.
How long does it take to prepare an LPA?
Generally speaking, the above process takes about 6 weeks if you provide us with timely instructions.