A Lasting Power of Attorney (LPA) is a document that gives someone you trust (your ‘Attorney’), the legal authority to make decisions on your behalf; this may be as a result of you losing the mental capacity to do so, or if you no longer want to make decisions for yourself.
There are in effect three types of Power of Attorney:
• An Ordinary/General Power of Attorney,
• An Enduring Power of Attorney (EPA), or
• A Lasting Power of Attorney (LPA).
An Ordinary or General Power of Attorney is a relatively common and well-known document generally granted by the Donor for a fixed period of time or for a particular purpose. The property seller who is going to be abroad at the time of completion may, for example, grant an Ordinary Power of Attorney to his Solicitor to complete on his behalf.
An Enduring Power of Attorney (‘EPA’) was the forerunner of the more flexible LPA and dealt with property and financial affairs only. Those granted before the law changed in 2007 remain in force but no new EPAs can be created.
Lasting Powers of Attorney are flexible to account for changes and deal with health and personal welfare as well as property and finances. They provide a platform on which the donor can grant detailed and wide-ranging powers, usually until death or earlier revocation. The real strength of the LPA is, that once registered with the Court, it will survive the Donor’s descent into incapacity and allows the Donor to plan ahead for a time when he may find himself unable to manage his own affairs. That is particularly important as it is often just when the Donor is finding it increasingly difficult to cope that the big decisions in life and the major transactions need to be addressed, perhaps at short notice.
Incapacity may be physical or mental or both. A traffic accident, a medical intervention gone wrong, a stroke or, the modern affliction of an aging population, dementia; any one could prevent an otherwise healthy individual from enjoying proper control over their affairs. The solution therefore is forward planning and the creation of an LPA.
There are three types of LPA:
• Property and Finance LPA
• Health and Welfare LPA
• Business LPA
An LPA limited to property and finance allows the Attorney to handle the simple day to day tasks like receiving payments on behalf of the Donor, paying bills, making sure income is transferred into the appropriate account and making cash available as required. It also covers the big decisions such as how to finance long term residential care and allows the Attorney, for example, to sell the Donor’s property for that purpose.
The Health and Welfare LPA is similar in terms but allows the Attorney to deal with the medical and care professionals on behalf of the Donor and decisions relating to where the Donor might live and what sort of care they might need. Again, it may be small and very personal matters, like ensuring that the Donor is not given food that they do not like or ensuring they continue to visit a particular place regularly as it holds some sentimental value. It may also be, though, for the big things in life like agreeing to invasive treatments or deciding when the Donor really cannot safely continue to live alone at home.
The Health and Welfare LPA can even go further, if the Donor wishes. He could allow his Attorney, if appropriate, to decide on whether or not to refuse lifesaving medical intervention.
For those with their own business, a Business LPA allows for a different Attorney to be appointed to take part on behalf of the Donor in the running of the business, helping to maintain the work/life balance into infirmity.
The true advantage of an LPA is that it allows the Donor, whilst fit and healthy, to make provision for his incapacity by appointing Attorneys of his choice in a manner which binds all when he is no longer capable. Without an LPA, loved ones would be unable to manage their affairs and would need to make an application to the Court for Deputyship, which can only be made on certification of incapacity. This takes control out of the hands of the Donor and is undoubtedly more expensive.
Choosing the right Attorney is crucial. Family are normally best placed as there is usually an affinity with the Donor. Likewise, partners or close friends.
The powers that can be given to the Attorney, the restrictions that can be placed on how and when they act and the parameters within which they take their decisions can all be determined by the Donor, such as wanting to stay within a certain distance of their home town should they have to go into residential accommodation or a wish to stay in their home unless their GP says it is unavoidable.
Although the process of registering Lasting Powers of Attorney is relatively straightforward and there is a facility to do it online, there are a number of common but avoidable pitfalls that, if not properly advised and addressed, can have a significant impact on the usability of the documents.
We can advise you, drawing on our extensive experience, not only of the law surrounding Powers of Attorney, but also the practicalities and the specific issues that may arise in your individual circumstances. We have the foresight to enable us to spot potential issues or obstacles that might arise in the future and draft the LPAs so as to avoid or prevent them, when the time comes that you need your affairs to run as smoothly as possible.
When deciding how to complete the task of preparing and registering LPAs, it is important to not lose sight of your reasons for making LPAs. The primary of which is to protect yourself and to enable those that you trust and love the most to have the correct and functioning tools to assist you when you will need it the most. We can help get that peace of mind.
Members of our Private Client team are on hand to advise on any issues relating to Powers of Attorney. Please telephone 01892 526344 or email email@example.com.
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The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.