Lasting Power of Attorney – legal advice and guidance
If, at a later point, you lack capacity and do not have a LPA, no one can legally make decisions for you. This could cause significant distress and hardship, without an Order from the Court of Protection (a lengthy and costly process).
LPAs can be complicated, so here you understand what they are, the different types, and the things to consider when applying for one. We have also written this guide to LPAs and dementia, which you may find helpful as well as a link to a free guide that you can download.
Different Types of Powers of Attorney
There are three main types of Powers of Attorney. Whether you’re considering making one or have been appointed as an attorney yourself, it’s important to know the differences.
1. General Powers of Attorney (GPAs)
The scope of a GPA is potentially very wide – it can be used to give the attorney authority to do anything which the donor can legally do. These are most often used in a commercial context for one-off decisions e.g. for the execution of deeds or for the signing of transaction documents. A GPA is unlikely to be appropriate for individuals concerned with long-term planning as it is automatically revoked when the donor loses capacity.
2. Enduring Powers of Attorney (EPAs)
An EPA authorises the attorney to manage the donor’s property and financial affairs. Unlike a GPA, an EPA will remain effective even after the donor has lost capacity.
Since 1 October 2007, it has not been possible to create new EPAs and they have now been replaced by Lasting Powers of Attorney (LPAs). Although EPAs created before 1 October 2007 remain valid it’s not uncommon for banks and other financial institutions to query their validity. This can lead to problems in using them just when they are most needed. This is why many of our clients choose to put in place new LPAs to avoid potential delays and difficulties in seeking to rely on old EPAs.
Importantly an EPA does not confer any powers in relation to medical and care decisions. You would need to put in place a new LPA for health and welfare to enable your family or friends to be able to make those sorts of decisions.
3. Lasting Powers of Attorney (LPAs)
LPAs were introduced and are governed by the Mental Capacity Act 2005. There are two types of LPA:
LPAs for property and financial affairs
This type of LPA gives the attorney authority to manage the donor’s finances, including paying bills, dealing with investments and selling property. The donor can elect for the LPA to become effective immediately upon registration or only in the event that they lose capacity.
LPAs for health and welfare
An LPA for health and welfare allows the attorney to make decisions about the donor’s medical treatment and care. This includes day-to-day decisions such as where the donor will live and what care they receive as well as more major treatment decisions. The donor can also choose to give the attorney authority to consent or refuse life-saving treatment on their behalf. An LPA for health and welfare can only be used once the donor has lost capacity.
I have an EPA, can I have a LPA as well?
Financial LPAs replaced EPAs on 1 October 2007. Therefore, it is not possible to amend your EPA if you are not happy with it. Instead, you will need to make a new Financial LPA.
However if you are happy with your EPA but merely wish to make a Welfare LPA, that is perfectly fine and we can help with that process. The legislation (and associated powers) with EPAs and LPAs differ so you should review your EPA with a solicitor to check if it is still fit for purpose.
Common LPA errors
LPAs are complicated and a simple error can have serious consequences. These are the most common errors we see with LPAs.
- Incorrect execution – an LPA must be created in the prescribed form and signed in the prescribed manner and order: Donor (person creating the LPA), Certificate Provider and then the Attorney/Replacement Attorney.
- Lack of Donor’s knowledge around how their Attorney can act and when and what the Attorney can do e.g. the limitation on gifting permissible under the Mental Capacity Act 2005.
- Issues with joint Attorney appointments – Attorneys not getting on, or indeed incorrect understanding of the role, failure of some Attorney appointments (where jointly appointed).
- Wording incorporated (Instructions and Guidance) in the LPAs that the Office of the Public Guardian seeks to take issue with as incompatible with the Attorney’s abilities.
- Incompatibility issues between your Welfare LPA, the powers it seeks to grant, and existing Living Will/advanced directive.
- Witnesses not completing their full names where asked for in the LPA.
- Whether the Donor had the capacity to make the LPA in the first place.
- Lack of incorporation of specific Instructions/Guidance to tailor the LPA to the individual’s needs, e.g. including Instructions to authorise the continued use or the future use of discretionary fund management where appropriate.
- People wishing to amend their LPAs once registered with the Office of the Public Guardian. Other than in very limited circumstances this cannot be done, therefore care needs to be taken to get it right at outset.
- Attorneys not understanding their role and acting outside of their powers, e.g. seeking to amend the Donor’s Will or helping themselves to the Donor’s funds either through ignorance or deliberately.
What happens if you don’t have an LPA?
If someone has lost capacity and they do not have a LPA for the decision in question, an application will need to be made to the Court of Protection for either a Deputyship or a specific Order.
Either way, an application to the Court of Protection is a very slow process and often requires significant paperwork and complexity in comparison with the cost of making a LPA.
Unfortunately, in our experience, by the time an application is needed to the Court of Protection, the situation can already be very stressful so the additional delay and cost is an unwelcome pressure.
In addition you do not have a choice as to who makes that application on your behalf. So you may find that the successful applicant is not the person who you would have chosen to trust.
For that reason, if you are ever mindful of executing LPAs we would recommend that you do so immediately.
How can you make an LPA?
LPAs can only be made in the prescribed form but it is entirely up to the individual as to who to use; the Office of the Public Guardian provide information on their website and access to the forms. You can use a solicitor/legal professional who can advise and assist with all stages of and the completion and registration of your LPAs.
It is really important you consider a number of factors before you begin your application, and talking to a professional can help you understand the information you need.
For example, are you appointing a single Attorney to act? What about replacement Attorney/s? If appointing more than one Attorney you will need to decide whether their appointment is joint, joint and several, or joint for some decisions and jointly and severally for others. It is important you understand these options and how they work?
Do you need to incorporate any specific Instructions and Guidance in your LPAs with regards to your thoughts about life sustaining treatment, care provision for you as you grow older or your financial affairs, use of investments both now and in the future? Do you use online banking? Do you need to incorporate any specific permissions in this regard? Is it useful to spell out clearly for your Attorney/s what it is they can and cannot do or where they should look for Guidance?
Is it just a Financial LPA you need? Or Welfare LPA or both? Only by understanding fully what both LPAs allow and involve will you be able to make an informed decision.
It is therefore our advice always to seek specialist professional assistance with a solicitor experienced in making LPAs when making decisions in respect of what are extremely important and powerful documents.
How can we help you?
We are experts in the advising and provision of LPA’s, in particular;
- What each type of LPA (Financial and Welfare) does and will legally allow.
- The legal framework underpinning LPA’s and how the documents work, what is legally permissible, and how and when your Attorney/s acts.
- Advice on how to appoint your Attorney/s if more than one. Replacement Attorneys – how these are incorporated, and the various joint types of appointment that can be incorporated and what they mean.
- We can work through with you whether your Attorney/s are correct for the role by explaining the framework an Attorney acts within, so you can be sure you are appointing the correct person/people.
- As experts in capacity, we can identify and deal with any capacity issues that may arise, and act as Certificate Provider for you, at no extra charge.
- If necessary and appropriate, act as Professional Attorney (WKTL) for you.
- Take a holistic view of your situation so that we can make sure your LPA’s are drafted to include all appropriate Guidance and Instructions for you (e.g. Welfare – thoughts on home care, life sustaining treatment etc, or Financial – authorisation for online banking, investments, dealing with the assets you hold appropriately).
- Register your LPA with the OPG or indeed advise you on whether you wish to delay registration of your LPA, and what that will mean.
- Store your registered LPA for you if you require in our strong room.