As with most areas of Private Client law, nobody likes to discuss the topic of growing old or losing mental capacity. By making a Lasting Power of Attorney (LPA) you can ensure that someone you trust will be able to manage your affairs on your behalf if you are no longer able to.
Who needs a Lasting Power of Attorney?
LPAs are something that I have recommend to many clients for many reasons. Some may see LPAs as documents that are only required by those who are elderly or those with failing health. However, accidents or illness can occur at any time in life, and as a result of which you may need someone to manage your affairs on your behalf.
LPAs are legal documents which allow you to appoint one or more people (known as your attorneys) to be able to make decisions on your behalf if you were to lose the mental capacity to make decisions yourself in the future. You can choose to appoint anyone you like to be your attorney, provided that they are aged 18 years or over and they are mentally capable of making decisions for themselves.
Types of Lasting Power of Attorney
There are two types of LPAs: one covering Property and Financial affairs, the other for Health and Care decisions. You can choose to set up one or both types of LPA depending on your circumstances. For an LPA to be legally valid, it must be signed by all parties and their signatures witnessed by an independent person. Once the LPA has been signed and witnessed it must then be registered with the Office of the Public Guardian.
A Property and Financial affairs LPA
A Property and Financial affairs LPA covers decisions about your finances and property and can include paying household bills, speaking with companies regarding accounts you hold with them, managing your bank accounts and even selling your property if necessary. If you decide to, you can choose for a Property and Financial affairs LPA to give your attorneys authority to make decisions on your behalf as soon as it has been registered with the Office of the Public. This may be useful in circumstances where you are in hospital for long periods and need your attorneys to manage your affairs during this time.
If you own a business, it may also be sensible to prepare a separate Property and Financial affairs LPA to allow different attorneys to manage your business affairs on your behalf if lose the capacity to make decisions about these matters for yourself.
Health and Care decisions LPA
A Health and Care decisions LPA allows your attorneys to make decisions regarding your day-to-day care and where you should live. This LPA also allows you to decide whether you would like your attorneys to make decisions on your behalf regarding life-sustaining treatment. This LPA will only give your attorneys the authority to make decisions on your behalf when you have lost the capacity to make these decisions yourself.
There is the possibility that you may set up an LPA and never need to use it, but they can also be a very useful insurance policy if you later lose capacity to make decisions for yourself.
What happens if I don’t have an LPA in place and I lose capacity to make decisions for myself?
LPAs can only be made whilst you have the mental capacity to understand who you are appointing and the effects that the documents will have i.e., giving your attorneys the same powers that you have to manage your affairs.
If you were to lose capacity to make decisions for yourself, your family or the local authority if you are living in residential care, would need to make an application to the Court of Protection to be appointed as a Deputy. These kinds of Court applications can involve a lot of different forms and information to be produced to the Court before they will consider whether an Order should be granted. An application to the Court can also take much longer to be granted than the preparation and registration of an LPA.
Another key difference between making an LPA and someone applying to be appointed as a Deputy is that it is not your decision who is appointed as a Deputy but a decision for the Court to make. Whereas, by making an LPA you can decide who you wish to appoint as your attorney and who you feel is most suitable to manage your affairs and make decisions on your behalf if you are unable to.
If you have further queries or you would like to discuss preparing Lasting Powers of Attorney, please do not hesitate to contact me or another member of our Private Client Team.
Helen Milburn, Associate Solicitor and Head of Wills Trusts and Probate.
