Our team has extensive specialist knowledge in matters such as high-net-worth tax planning, asset management and acting for clients who are no longer able to manage their own affairs. We advise on and draft Lasting Powers of Attorney for clients who are preparing their finances for the future and wish to have an attorney in place to act on their behalf, should they become unable to do so themselves.
What is a Lasting Power of Attorney?
A lasting power of attorney (LPA) is a legal document that lets you (the ‘donor’) appoint one or more people (known as ‘attorneys’) to help you make decisions or to make decisions on your behalf. This gives you more control over what happens to you if you have an accident or an illness and cannot make your own decisions (you ‘lack mental capacity’).
There are two types of Lasting Power of Attorney
Health and welfare lasting power of attorney
Use this to give an attorney the power to make decisions about things like:
- your daily routine, for example washing, dressing, eating.
- medical care
- moving into a care home
- life-sustaining treatment
- It can only be used when you are unable to make your own decisions.
Property and financial affairs lasting power of attorney
Use this to give an attorney the power to make decisions about money and property for you, for example:
- managing a bank or building society account
- paying bills
- collecting benefits or a pension
- selling your home
Can you appoint more than one person as your attorney?
Yes, you (the donor) can appoint more than one person to be an attorney. This can work in one of two ways:
Attorneys appointed to act together (also known as joint attorneys) – this means they must always act together. The advantage of this arrangement is that it makes it harder for an attorney to commit fraud or do something against the interests of the donor. The disadvantage is that the whole power of attorney comes to an end if one attorney dies or becomes mentally incapable.
Attorneys appointed to act together and independently (also known as joint and several attorneys) When attorneys are appointed in this way, it means that the signature or action of one attorney is as valid as if they were the only attorney. It also means that the power of attorney will continue in force if anything happens to one of the attorneys.
Who can be an attorney?
The person appointed to act on behalf of the donor is called an attorney. Anyone can be an attorney, as long as:
- they are capable of making decisions, and
- they are 18 or over
In some cases, someone who is bankrupt cannot be an attorney. If an attorney becomes bankrupt, power of attorney may be taken away.
Solicitors and trust corporations such as banks can act as an attorney. Professional attorneys can charge for their services. If your attorney is a friend or relative, they can claim out-of-pocket expenses, but they can only get paid for carrying out their duties if the donor has agreed to this.
Are there different types of Lasting Power of Attorney?
There are two different types of Lasting Power of Attorney:
- Health & Welfare
- Property & Financial Affairs
You can have one or both Lasting Powers of Attorney in place at the same time. Most people choose to get both types of LPA for later life planning. This ensures that all the bases are covered, should mental capacity be lost in the future.
What is a Lasting Power of Attorney dealing with property and financial matters?
A Property & Financial LPA allows you to appoint an Attorney to make decisions about things such as:
- Buying and selling your property
- Paying your bills
- Collecting your pension or benefits
- Managing your bank accounts
What is a Lasting Power of Attorney that deals with health and welfare?
A Health and Welfare LPA allows you to appoint an Attorney to make decisions about things such as:
- Your medical care & whether you have life-sustaining treatment, although only if you have given express permission.
- Where you live and your daily routine.
- Who you have contact with.
What sort of financial arrangements can be made by a person granted power of attorney?
A Lasting Power of Attorney for Property and Finances gives your attorney control of your financial affairs. This can mean a number of things, including:
- Looking after your bank accounts and savings.
- Making or selling investments on your behalf.
- Buying and selling property on your behalf.
- Claiming and spending welfare benefits your behalf.
- Dealing with any debts you may have.
You can choose to give someone power of attorney to deal with all your property and financial affairs or only certain things, for example, only to buy and sell property.
Can I choose when a Lasting Power of Attorney comes into effect?
A Lasting Power of Attorney can be used if you lose mental capacity. In the meantime, you retain the right to make decisions for yourself. If you do lose mental capacity, perhaps due to a condition such as dementia or a stroke, your Attorney can immediately step in. This ensures someone you know and trust can make important decisions on your behalf straightaway.
Otherwise, a loved one will have to apply to the Court of Protection to get this authority. This can take a long time, meaning your bills could remain unpaid.
You can choose when the Property & Financial Affairs LPA comes into effect. If you want, it can be used as soon as it is registered. This is extremely useful for people who want help managing their property and financial affairs, even though they still have mental capacity, for example, if you are physically frail, or live abroad.
What is the role of the Office of the Public Guardian and what might need to be referred to this organisation?
The Office of the Public Guardian (OPG) is an independent statutory office established to protect the rights, interests and wellbeing of adults with impaired decision-making capacity. The OPG has many functions, one of which is to register Lasting Powers of Attorney and maintain a record of all LPAs which have been registered.
You might make a referral to the OPG if you were concerned about an attorney, for example if the attorney was misusing money or making decisions that are not in the best interests of the donor. The OPG has the power to investigate any reports made to ensure that donors are safeguarded.
Why should I set up a Lasting Power of Attorney?
If you lose capacity, unless you have already made Lasting Powers of Attorney, your loved ones will need to apply to the Court of Protection to become your deputy. This is a long and expensive process.
By setting up a Lasting Power of Attorney, this allows you to decide who should act on your behalf and makes your family’s lives easier.
You can only set up a Lasting Power of Attorney when you have mental capacity. Once you have lost mental capacity, it is too late, therefore it is important to set up an Lasting Power of Attorney as early as possible.
Why do I need help from a solicitor to set up a Lasting Power of Attorney?
Your solicitor has a duty to act in your best interests and will help you by ensuring that you fully understand the effect of your Lasting Power of Attorney. Your solicitor can ensure that your LPAs are drafted correctly, as making a mistake can be costly and result in your application for registration being rejected.
Your solicitor can also advise you of any other steps you should consider taking to protect your position, such as making or updating your Will or applying for any benefits you may be entitled to.
If I appoint an attorney to look after my finances and I have lost capacity, can he/she make gifts to themselves of my family and spend my money as if it was their own?
There are strict rules on gift-making that your attorneys must follow, and they may need to apply to the Court of Protection to seek authority to do so.
Before making a gift, your attorney will need to consider whether it is within your best interest on each occasion, taking into account the relevant circumstances.
The general rule is that attorneys must not make gifts from your estate, unless one of the following exceptions applies:
- The gift is given on a customary occasion for making gifts within families or among friends/associates.
- The gift is given to someone related or connected to you or to a charity that you supported or might have supported.
- The gift is of reasonable value, taking into account the circumstances in each case and, in particular, the size of your estate.
Attorneys have to be particularly careful if they are thinking of accepting a gift for themselves from your estate and the attorney must not take advantage of their position to benefit themselves.
If an attorney does accept a gift for themselves, the Court of Protection can look carefully at the decision and may decide the attorney went beyond their authority.
If I have lost capacity, could my attorney re-write my Will?
Generally, in order to make a Will, you must have capacity. A Lasting Power of Attorney does not enable your attorney to re-write your Will.
However, there is a procedure whereby someone can apply to make a Will on behalf of someone who lacks mental capacity through an application to the Court of Protection – these are known as Statutory Wills.
The applicant must state in their application the grounds for changing the existing Will or creating a brand new Will and the Court will then consider whether a new Will is in the donor’s best interests.
The applicant must have good reasons and the Court is generally happier to make a Statutory Will when the testator has never made a Will or there has been a significant change in circumstances.
What happens if I do not make a Lasting Power of Attorney?
If you lose capacity and do not have a Lasting Power of Attorney in place, your loved ones will find it difficult to help you as they will not be able to deal with your assets or make decisions on your behalf. Your bank accounts will be frozen which means your bills could remain unpaid.
In this situation, someone will have to apply to the Court of Protection to get the Court’s permission to be appointed as your deputy. As you will have lost capacity at this point, you can no longer express a view as to who you would want to appoint as your deputy, and instead the court will decide if the person applying is appropriate.
This is a lengthy and expensive process. The costs for applying for deputyship will likely be significantly higher than the application fee for Lasting Powers of Attorney and there are recurring annual costs for each year the deputyship is in place.
Can I cancel my Lasting Power of Attorney if I change my mind about who I want to act?
Your Lasting Power of Attorney can be cancelled at any time while you still have mental capacity. In order to do so, the original Lasting Power of Attorney will need to be sent to the OPG together with a written statement called a Deed of Revocation.
What is a Living Will and is that the same as a Health and Welfare Lasting Power of Attorney?
A Living Will, also known as an Advance Decision, is a legally binding statement detailing your wishes for refusing future medical treatment in circumstances in which you have lost capacity.
A Living Will does not need to be in writing unless you are refusing potentially life-sustaining treatment, but it is good practice to write it down and give a copy to your loved ones and all those involved in your care.
The rules about how a Living Will and Lasting Power of Attorney for health and welfare interact can be complicated and therefore it is best to seek legal advice about putting in place a Living Will.
Is there a specific form or protocol for a Living Will/Advance Decision/Advance Statement?
There is no specific form or protocol for a Living Will/Advance Decision or Advance Statement. It is good practice to write down any wishes you may have in respect of your care after you have lost capacity and give a copy to loved ones and those involved in your care. It is best to seek legal advice on these documents to ensure they do not interfere with your Lasting Power of Attorney or your Will.
What is the difference between an Advance Decision and an Advance Statement?
An Advance Statement is a statement which sets out your preferences, wishes, beliefs and values regarding future care. It can help those involved in providing you with care to have a clear idea of what you want if you lose capacity or are unable to communicate your decisions.
Unlike an Advance Decision, an Advance Statement is not legally binding.
Why should I make a Living Will?
A Living Will lets your family, carers and health professionals know your wishes about refusing treatment if you are unable to make or communicate those decisions yourself.
Any treatments you decide to refuse must be set out in your Living Will and you can also set out the circumstances in which you want to refuse treatment, for example if you have a stroke or dementia.
You may instead prefer to make a Lasting Power of Attorney for Health and Welfare to allow your attorneys to make these decisions for you.
Get legal support today
At Blaser Mills Law we understand the importance of putting the right planning in place for the future. Our team of Wills, Trusts and Probate solicitors are experts in the field and work with clients to find the best solutions for them and their families.
To speak to one of our Wills, Trusts and Probate solicitors about executing a Lasting Power of Attorney, you can contact us by calling on +44 (0) 1494 781 362, emailing at privateclient@blasermills.co.uk or filling in our contact form.