LASTING POWERS OF ATTORNEY – A BRIEF GUIDE
What is a Property and Affairs LPA?
A Property and Affairs Lasting Power of Attorney (LPA) is a legal document that allows someone (known as a Donor) to choose someone they trust (known as an Attorney) to make decisions on their behalf about their property and affairs.
Who can make a Property and Affairs LPA?
Anyone who is over eighteen and still able to make decisions in relation to their own property and affairs can make an LPA. This will, therefore, include someone who may have been diagnosed as suffering from the early stages of a dementing illness. It is necessary for the Donor to have a good appreciation of their family and friends, and any responsibilities they may have to the family or friends. The Donor also needs to understand roughly what savings and other assets they own. The fact that the Donor might suffer from short term memory loss does not necessarily mean that he or she cannot make an LPA.
Why might someone make an LPA?
LPA’s allow Donors to choose who should look after their financial affairs if they can’t do so themselves. Donors can choose the particular person (or people) whom they trust. They can also impose certain restrictions on what the Attorneys can do.
This can be useful for anyone as a means of ensuring the best possible financial care if they are suddenly struck by a severe illness. As it is quite an expensive process fewer people these days are creating LPA’s “just in case”. Perhaps the most common situation in which people decide to make LPA’s is when they have been diagnosed with the early stages of some form of dementing illness. In such circumstances there is clearly a possibility that such a person’s mental condition may deteriorate over a period of time. It can, therefore, be a very good idea for such a person to make the arrangements which suit them whilst they are still able to do so.
Who can be an Attorney?
Any person aged eighteen or over who has sufficient mental capacity can be an Attorney. From a practical point of view it is essential that any Attorney appointed should be completely trustworthy. It can often be an advantage for the Attorney to live locally to the Donor. This can make contact frequent and easy. If an Attorney lives abroad then the administration of the Donor’s affairs will be slower and more complicated. Nevertheless this can be appropriate in some cases.
The Attorney does not have to be a relative – often a competent friend may be a better choice. Sometimes it may be appropriate to include a Solicitor or Accountant as an Attorney – but they are likely to require payment for their services.
As well as being trustworthy the Attorney should be someone who is accustomed to dealing with day to day financial matters. You do not need an Accountant, but you probably need someone who is accustomed to dealing with the requirements of Utility Companies, Banks and other Financial Institutions.
We also point out here that it is possible to appoint a Trust Corporation to act as your Attorney. Many Trust Corporations are parts of Banks or other Financial Institutions and their charges for acting can be very high. However, such an appointment may be appropriate for some people.
How many Attorneys can be appointed?
There is no maximum number of Attorneys that can be appointed. There is also provision to appoint replacement Attorneys whose powers only arise if any of the original Attorneys become unable to act.
Most people making LPA’s appoint just one or two Attorneys. If more than one Attorney is appointed then it is necessary to decide whether they must act together or whether they can act together and independently. There are advantages and disadvantages to both types of appointment and we would discuss these with you in some detail.
What are the formalities involved in creating an LPA?
An LPA has to be created on the form prescribed by the Mental Capacity Act 2005 and its subsequent rules. The LPA form is twenty five pages long and has to be completed with the utmost care. It must take account of the Code of Practice, which has been drawn up under the provisions of the Mental Capacity Act, and the guidance issued by the Office of the Public Guardian.
It is necessary for the LPA to be countersigned by another person (called “the Certificate Provider”). The Certificate Provider has to meet the Donor and go through the LPA with him or her. If the Certificate Provider is satisfied that the Donor understands the nature and effect of the LPA and the powers which the LPA give the Attorney the Certificate Provider then countersigns once the Donor has signed the LPA. The Certificate Provider must either be someone who has known the Donor for more than two years, or a member of certain professions. Some people cannot be Certificate providers – in particular, members of the donor`s family or any of the Attorneys under that LPA
The Attorney(s) must then sign the LPA.
Once all the steps mentioned above have been carried out successfully a valid LPA will have been created. However, it cannot be used until it has been registered by the Office of the Public Guardian.
What is the registration process?
The original LPA has to be filed with the Office of the Public Guardian for registration. The OPG charge a fee for this service (currently £150). The Mental Capacity Act prescribes the form of application which must be used to register the LPA. It also requires that before the LPA can be registered certain individuals (selected by the Donor) need to be notified. The notified individuals have the opportunity to object to the registration or to raise concerns with the Office of the Public Guardian before the LPA is registered.
If the time allowed for objections expires and no objections have been received then the OPG will register the LPA. The registered LPA is then returned to whoever submitted it. This could be the Donor, an Attorney or a Solicitor acting on behalf of either of them.
What is the scope of an LPA?
The great majority of LPAs relate to “Property and Affairs”. They relate only to the ability to look after someone’s income, outgoings, assets and liabilities. In other words they are to do with the management of someone’s finances. It is possible to make another type of LPA called a Personal Welfare LPA. Personal Welfare LPAs are completely separate documents and have all the same formalities as Property and Affairs LPAs. Therefore if anyone wants both it is necessary to go through all the same formalities in relation to both documents (including two £150.00 registration fees).
Personal Welfare LPAs are designed to allow the Attorney to make decisions in relation to care and welfare (including healthcare treatment). If the Donor wants a Personal Welfare LPA to allow the Attorney to make decisions in relation to life sustaining treatment then the LPA must specifically give that power. The more usual decisions will be about such things as where the Donor might live and who they should live with; consenting to or refusing routine types of medical examination and treatment; indicating who the Donor may have contact with or whether the Donor would take part in particular social or leisure activities. We think that relatively few of our clients will want to make Personal Welfare LPAs.
How can Maxwell Hodge help?
Maxwell Hodge (and Maxwell Entwistle & Byrne before them) have many years experience advising people in relation to the administration of their affairs. Over those years we have prepared many thousands of Enduring Powers of Attorney and acted in many Receivership applications to the Court of Protection. Since the Law changed in October 2007 we have continued to advise and assist in relation to LPAs and Deputyships.
A number of our Partners act personally as Attorneys for clients. We have also been appointed by the Court of Protection to act as Receivers or Deputies for other clients who are unable to administer their affairs.
Several of us have been touched by these problems in our own families. Some of us do voluntary work with Alzheimer`s Society or Age Concern. We therefore have a wealth of personal experience to draw on when advising people in these situations.
We know that it is often helpful if clients can be seen in the familiarity and comfort of their own homes and we make many home (or care home) visits.
We recognise that the issues which need to be faced are frequently, very challenging and emotional. We strive to offer a professional, yet informal and caring service. Our clients tell us that we do so – but we don`t rest on our laurels. If you think we can improve our service then please do tell us how.
This note is intended to provide a brief overview of Lasting Powers of Attorney and their creation. It does not attempt to go into any detail, but we hope you find it helpful in understanding a little more about Lasting Powers of Attorney.
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