Lasting powers of attorney
While we all hope that we will end our days in full possession of our mental faculties, the reality is that we can lose our ability to make informed decisions through accident, injury or illness. Making a Lasting Power of Attorney (LPA) enables you to plan for this situation by appointing someone to manage your financial and health affairs should you lose the ability to do so yourself.
A sobering number of people are affected by head injuries or mental illnesses every year. The statistics for traumatic brain injury (caused by falls, sporting incidents or road traffic accidents), acquired brain injury (from strokes, heart attacks, brain tumours and brain haemorrhages) and dementia reinforce the importance of appointing someone to take responsibility for your affairs should you be affected.
Taking back control
Making a Lasting Power of Attorney under the Mental Capacity Act 2005 (MCA 2005) enables you to plan for this eventuality by appointing someone who can manage your legal, financial and health affairs should you lose the ability to do so yourself, whether temporarily or permanently.
Anyone aged 18 or over with the capacity to do so can make an LPA appointing one or more attorneys to make decisions on their behalf.
An LPA is a powerful document, and an effective insurance policy against you losing mental capacity and the consequences for your family and finances.
There are two types of Lasting Power of Attorney.
Property and financial affairs LPA
A property and financial affairs LPA empowers someone you trust (the attorney) to make decisions on your behalf about your property and financial affairs at a time when you are no longer able, or lack the mental capacity, to take those decisions yourself. This can include paying your bills, collecting your income and benefits or selling your house, subject to any restrictions or conditions you might have included. It can only be used once it has been registered at the Office of the Public Guardian (OPG).
Health and welfare LPA
A health and welfare LPA allows your Attorney to make decisions on your behalf about your personal welfare, for example, where you live and the kind of care you receive. It can empower the Attorney to give or refuse consent to medical treatment provided this power has been expressly given in the LPA.
If you had already made an advance decision to state that you do not wish specified life sustaining treatment to be given at a future time, a subsequent LPA giving the Attorney that decision making power will invalidate the advance decision, and the Attorney will have the power to decide whether to refuse such treatment on our behalf. A subsequent advance decision (if applicable in the circumstances) would be binding on the Attorney.
A health and welfare LPA can only be used once the form is registered at the OPG and once you have become mentally incapable of making decisions about your own welfare.
Protection for you
Making either kind of LPA includes specifying the person or persons who must be notified should your Attorney/s wish to activate the LPA by registering it with the OPG. This means that you have the opportunity to nominate friends and family who, independently of your Attorney/s, can ensure that the LPA is not going to be abused and that you are genuinely unable to make a decision at the point in time that decision needs to be made. If you recover your mental capacity (for example, after an illness) then your Attorney must allow you to recommence making decisions for yourself.
Choosing an Attorney
You can choose anyone you trust to act as your Attorney provided they are over 18 and not bankrupt when they sign the LPA form. You can appoint more than one person to act. You can also appoint replacement Attorneys. If you appoint more than one person, you can choose whether they can act together, or together and independently. You can state that your Attorneys must act together for some decisions but for others they can act independently.
Your Attorney must follow the principles set out in the MCA 2005 when they are making decisions or acting on your behalf. Those principles are:
- Every adult has the right to make his or her own decisions and must be assumed to have capacity to do so unless it can be proven otherwise (“the presumption of capacity”, MCA 2005 s. 1(2))
- A person must be given all the help practicable before anyone concludes that he or she cannot make his or her own decisions (MCA 2005 s. 1(3))
- A person retains the right to make what might be seen as an eccentric or unwise decision (MCA 2005 s.1 (4))
- Anything done for, or on behalf of, a person who lacks capacity must be in his or her best interests (MCA 2005 s. 1(5))
- Anything done for, or on behalf of, a person lacking mental capacity should be the least restrictive option taking their basic rights and freedoms into consideration (MCA 2005 s.1(6))
Your Attorney’s duties
Your Attorney/s must always act in your best interests and consider your needs and wishes as far as possible. When possible, Attorneys should take all practical and appropriate steps to help you make the particular decision. An Attorney must consider your past and present wishes.
Your Attorney/s must not take advantage of your position to gain any benefit for themselves. They must keep any entrusted money and property separate from their own and from that of other people and they must keep accounts of any dealings on your behalf.
Attorneys must keep affairs relating to the LPA private unless otherwise stipulated on the LPA form or if it can be demonstrated that it is in your best interests to pass on information to somebody else. A person can refuse to act as Attorney but if they agree to take on the responsibility, they immediately become subject to the duties of an Attorney. Failure to comply could mean the LPA is cancelled and in some cases the Attorney may be taken to court on charges of fraud or negligence. The role carries with it power and responsibility and should not be entered into lightly.
Registering your LPA
We recommend that you register your LPA/s as soon as they have been executed to ensure that they can be used without delay should the need arise. Our fees for producing your LPAs include supervising the registration process at the OPG. The OPG charges an administrative fee of £130 per LPA which is payable by you in addition to our professional fees. Depending on your financial circumstances we may be able to apply for a rebate or total exemption from the OPG’s fee.
The consequences of not having an LPA
If you have no LPA in place, and lose mental capacity, the Court of Protection may appoint a “Deputy” to make ongoing decisions on your behalf.
Applying to be a Deputy can be expensive and lengthy. Court costs include an application fee of £400, a registration fee of £500 and a supervision fee of up to £800 per annum. Solicitors’ fees for the necessary CoP applications can run into thousands of pounds. It can take many months before a Deputyship order is made, and in the interim your financial affairs would effectively be frozen – a particular problem if care home fees are being funded privately – and all welfare decisions would rest with your medical team and/or social services. The CoP will only appoint one Deputy, who may not be the individual you would have chosen.
Enduring Powers of Attorney
Prior to October 2007, people could grant an Enduring Power of Attorney (EPA) which would allow a trusted person could act for them if they could no longer manage their finances. Any EPA remains valid, whether or not it has been registered with the OPG, provided that both the donor of the Power and the Attorney/s signed the document prior to 1 October 2007.
An EPA can be used by your Attorney while you still have mental capacity, provided you consent to its use. If you start to lose the mental capacity to manage your finances, your Attorney/s are under a duty to register your EPA with the OPG. While the registration is being processed (which will take a minimum of eight weeks), your Attorney/s can use your finances for essentials on your behalf such as paying for food or payment of regular bills. However, they will not be able to deal with larger transactions such as the sale of your house until the EPA has been registered.
The two biggest drawbacks with EPAs are that:
- they do not cover health and welfare matters
- once the decision has been made to register them, you are treated as mentally incapable – they lack the requirement, under an LPA, of a case-by-case assessment by your Attorney of your decision making capacity. Although in practice you and your Attorney might be able to come to an arrangement regarding the day to day management of your finances which would allow you to retain an active role, it would be difficult to establish that you had the sufficient mental capacity to, for example, make or change your Will or execute an Advance Decision
If you already have an EPA we would be delighted to review it with you and to discuss whether it remains adequate for your needs. We have experience of registering, and revoking, EPAs and can assist Attorneys in this process.
Contact us today on 07887 946 557 or online to discuss how Alex Truesdale Wills Limited can help you with a Will or associated service.