Powers of attorney: ensuring your property, finances & health are taken care of
If you want to give someone the power to make decisions about your finances and health if/when you're no longer able to, you'll need to make powers of attorney.
To help you understand a little more about powers of attorney, we've put together this guide to powers of attorney, including the different types of power of attorney and how to make and register one.
The old type - Enduring Powers of Attorney
As of 1 October 2007, it is no longer possible to make an Enduring Power of Attorney (or an EPA as they are commonly known). However, any EPA signed before that date remains valid and can still be registered. Unlike Lasting Powers of Attorney (see below), EPAs are only registered once the person who made them (the donor) loses mental capacity.
The current type - Lasting Powers of Attorney
Lasting Powers of Attorneys (or LPAs as they are commonly called) can deal with both your financial affairs and property and your health and welfare. Unlike ordinary powers of attorney, LPAs continue to be valid if/when a person loses mental capacity. However, as with ordinary powers of attorney, LPAs can only be made by persons who have mental capacity at the time they are made.
LPAs provide a robust and welcome way for persons to ensure they will continue to be looked after if/when they lost mental capacity by choosing exactly who they want to make key decisions.
A person making an LPA (known as a donor) can decide whether they want the LPA to be effective from the date it is signed (i.e. before and after they lose mental capacity) or only once they lose mental capacity.
There are two types of LPA: a financial decisions LPA and a health & welfare LPA.
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Financial Decisions Lasting Power of Attorney
As the name would suggest, a Financial Decisions LPA deals with a donor’s assets (e.g. their bank accounts and house). The donor can specify exactly which assets the LPA should and should not apply to. If the donor wishes to, they can also express any specific wishes they have to their attorneys (e.g. not to sell certain assets without first consulting with the donor’s spouse).
Health & Welfare Lasting Power of Attorney
If a donor would like to give power of attorney to someone to make decisions on their health and welfare once they lose capacity, they can make a Health & Welfare LPA. As the name suggests, this LPA deals with decisions as to the health and welfare of the donor. The most important decision to be made on this LPA is whether the donor gives the attorneys the power to make decisions about life-saving treatment.
What do you need to consider when making an LPA?
When making either LPA the donor will, amongst other things, need to decide: • Who the attorneys will be (they will also need to be happy to act). • How they should act (e.g. jointly or jointly and severally). • If any replacement attorneys should be appointed.
When completing an LPA a “certificate provider” will be required. The certificate provider confirms that the donor has mental capacity to make the LPA. A certificate provider must be someone who has known the donor for over two years or a person with relevant professional skills (e.g. a doctor or solicitor). Care must be taken to ensure the certificate provider is not a “restricted person” (this includes, for example, a member of the donor’s or attorney’s family, a business partner or colleague or a carer in the donor’s care home).
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Notifying independent persons of registration
The donor has the option to notify certain independent persons that the LPA is being registered. A notification will be sent to those persons and they will have a certain period of time to object to the registration.
What stops the attorneys taking advantage of the situation?
All attorneys appointed by an LPA must act in accordance with certain guidelines. For example, they must act in the best interests of the donor and should try, so far as possible, to help the donor make decisions for themself. If a donor makes a decision and an attorney disagrees with, it does not give the attorney the power to go against that decision. Ultimately of course, the best protection is for the donor to appoint someone they trust to be the attorney.
What is the registration process?
Once the forms are complete, the LPA will need to be sent to the Office of the Public Guardian with the appropriate application forms, certificates and copies of notices of intent to register. A cheque for the registration fee (£110 per LPA as at March 2016) will also need to be sent.
Do you need a lawyer?
The forms and procedures required to make and register LPAs are lengthy and can be complex for those who aren’t familiar with them (which is most people!). As such, anyone wishing to make an LPA would be well advised to seek the assistance of a specialist private client lawyer. They will be able to advise on all aspects of the LPA and can assist with making the LPA(s), acting as certificate provider, notifying the necessary persons and registering them.
Charlie is a Partner and head of his firm's private client team in Exeter. He primarily focuses on wills, probate, estate planning and lasting powers of attorney. He is recommended in Legal 500.
Minesh's specialisms include: Wills, Lasting Powers of Attorney, Enduring Powers of Attorney, issues affecting the elderly, inheritance tax mitigation and probate. Minesh takes a calm and pragmatic approach to his practice, ensuring that his clients are assured and confident throughout the process.
Rachell has built a reputation for her flexible modern working practices, ensuring she is accessible to suit the needs of her clients. She has a thorough approach and reassuring manner and is committed to ensuring the best outcome for her clients.