Lasting Power of Attorney
Looking for help with creating a Lasting Power of Attorney? Our experienced private client team provide LPA’s for clients throughout Wiltshire, Hampshire and Dorset – from our four offices in Salisbury, Fordingbridge, Amesbury and Andover.
Lasting Power of Attorney – what is it?
The Lasting Power of Attorney (LPA) was introduced on 1st October 2007 – it is now the main way to give an attorney the authority to look after a person’s financial affairs. The LPA operates both before and after a person becomes incapable of managing their own affairs.
An LPA allows you to name someone you trust to manage your affairs in the event that you are no longer capable. Lasting Powers of Attorney for monetary matters and property can be used as soon as they are registered -although the donor’s directions have to be followed, except when they lose mental capacity.
Different types of LPA
The power to look after money and property is called a ‘Property and Affairs LPA’.
There are also ‘Personal Welfare’ LPAs, which give an attorney the power to make decisions about non-financial matters, such as where one should live or medical treatment.
The Property and Affairs LPAs (like their predecessors, the EPAs) can give the attorney authority to act both before and after the onset of mental incapacity. However, unlike EPAs, Lasting Powers of Attorney must be registered with the Office of the Public Guardian (OPG) before an attorney has power to act and there is a Court fee payable for the registration, currently £110 (although there are certain remissions and exemptions for this fee for those on means tested benefits and low incomes).
The Personal Welfare LPA, however, can be used by the attorney only after a person has lost capacity and, once again, has to be registered with the Public Guardian before it can be used.
What happened to the Enduring Power of Attorney?
The previous type of power of attorney (Enduring Power of Attorney – EPA) can no longer be created. However, existing EPAs, ie those granted before 1st October 2007, will continue to be effective.
The LPAs are much longer documents than the old EPAs. Primarily, this is because the person giving the power (‘the donor’) has far greater choices, for example:
- the donor can appoint a replacement attorney to act if an original attorney can no longer do so;
- restrictions and conditions can be placed on the attorney;
- the donor is able to give guidance to his attorney about matters he would wish considered when decisions are made;
- the donor can nominate who they would like to be notified of registration of the LPA.
What is a Certificate Provider?
Another major difference between the LPA and the old EPA is that there is a requirement for a Certificate Provider. This is a person who has to certify that the donor understands the purpose of the LPA, the extent of the authority they are giving to the attorney and that the donor is not being influenced or pressurised into giving the Lasting Power of Attorney.
Certificate Providers are people who have either known the donor personally for a minimum period of 2 years, or someone chosen by the donor who has the relevant professional skills and expertise to certify the LPA, e.g. a solicitor or a doctor.
Attorneys under Lasting Power of Attorneys are under an obligation to act in accordance with the principles of the Mental Capacity Act 2005 and to have regard to the Act’s Code of Practice. The objective of the new legislation is to be supportive and enabling, so that attorneys should always try to encourage their donor to make and/or participate in decision-making whenever possible.
Mental Capacity – What it is and What it Means
The 2005 Mental Capacity Act was introduced to bring further clarification to the somewhat cloudy legal area of mental capacity. The two main parts of this Act are “capacity” and “best interests”.
According to the Act, a person does not have mental capacity when the mind or brain does not allow them to make a decision for themselves at a given time. Lack of mental capacity is not always regarded as a permanent state. Some people may lack mental capacity at certain times and in making certain decisions.
When a person lacks capacity:
- They can’t understand how to make a decision or the consequences of their choice
- Memory retention is so short that they cannot remember the details and circumstances surrounding a decision
- They can’t put information to use in the decision making process
- They are unable to communicate their decision in any way
When a person is seen to lack mental capacity, those making decisions on the person’s behalf must choose what is in the person who lacks mental capacity’s best interests.
It is assumed a person possesses mental capacity until it is proven otherwise; and several methods have been used to try and help the person make their own decisions.
What happens if someone loses mental capacity and has not made an LPA?
Without a Lasting or Enduring Power of Attorney in place, if someone loses the ability to manage their affairs, then it is likely that the Court of Protection will need to be involved. Click here to read more about the Court of Protection
What an attorney needs to consider
An attorney appointed to represent a person’s best interests needs to take a number of factors into account:
- Current wishes of the person
- Past wishes of the person
- Values and beliefs of the person
- Other relevant views from people such as family members
The OPG has prepared guides that are essential reading for people considering making an LPA and for their proposed attorneys.
Who decides if the donor had mental capacity or not?
The answers are provided by the Mental Capacity Act 2005 as follows:
• You start from the presumption that the donor does indeed retain mental capacity
• Different levels of capacity are required for different decisions. For instance, quite a high level of mental capacity is required when large gifts are to be made; but at a much lower level of capacity is required if, for example, the donor is just spending small amounts of money on themselves.
• Just because the donor makes an unwise decision does not mean they have lost capacity
• Even when the donor is not deemed to have sufficient capacity for the decision in question, they must be involved and consulted so far as possible in the circumstances.
It is therefore absolutely critical that when making a Lasting Powers of Attorney the donor appoints an trusted attorney who they believe will stick to their wishes and respect their right to make decisions.
What happens if there is concern about abuse of an LPA?
If concerns raised the possibility of abuse the power of attorney, in some instances where the donor retain some level of capacity, the Power of Attorney can be revoked.
However, in cases of abuse where the donor is no longer seen to retain sufficient mental capacity, then the local authority has the power to become involved.
LPAs are longer and more complex than the old, simple EPAs. We are happy to give an estimate of our fees and let you have copies of the guides referred to above, for those considering making a Lasting Power of Attorney and those thinking about taking on the role of attorney.