5 Key questions on Lasting Powers of Attorney answered
If disaster should strike and you are no longer in a position to look after your own affairs, having a lasting power of attorney (LPA) in place can help take away some of the stress and practical difficulties in managing finances and making decisions regarding you and your family’s future.
Lasting Powers of Attorney are designed to be recognised by health care providers, financial institutions, local authorities as well as care homes. Below are important questions which we have answered to assist you with your decision on creating an LPA.
1. What is a Lasting Power of Attorney?
An LPA is a legal document that lets you (the ‘donor’) appoint one or more people (called ‘attorneys’) to assist you with making decisions or to make decisions on your behalf. This should enable you to retain control if you have an accident or an illness and cannot make your own decisions as someone you trust can help with decision-making.
In order to make an LPA, you must be 18 or over and have mental capacity (discussed below) at the time of making your LPA. If you decide to have more than one attorney you can specify how they should work together in making decisions and you can also impose restrictions on what they can or cannot do.
2. What is mental capacity?
Mental capacity is the ability to make a decision. This could be a decision that affects daily life, for example, what to wear or more significant decisions, for example, whether to undergo a surgical procedure or purchase an investment. What is important is a person’s ability to carry out the processes involved in making the decision and not the outcome of the decision.
The test for mental capacity under the Mental Capacity Act 2005 is set out in section 2(1):
‘a person lacks capacity in relation to a matter if at the material time he is unable to make a decision for himself in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain.’
This means that there is a two-tier test of capacity:
– Does the person have an impairment of, or a disturbance in the functioning of, the mind or brain?
– Does the impairment or disturbance mean that the person is unable to make the specific decision at the time that it needs to be made?
The impairment or disturbance can be permanent or temporary. A lack of capacity cannot be established simply because of someone’s age or appearance or behaviour.
3. What types of Lasting Powers of Attorney are they?
There are two types of LPA. One is for property and financial affairs, the other is for health and welfare. You can decide to have an LPA for just one type or both.
– Property and Financial Affairs
This gives your attorneys the authority to make decisions in relation to your finances and property such as paying bills, operating your bank accounts and buying/selling your property or investments. A property and financial affairs LPA can be used as soon as it is registered provided you have given permission for this.
– Health and Welfare
This LPA can only be used once you have lost capacity and are therefore unable to make your own decisions. It gives your attorneys the authority to make decisions about your health and welfare such as your medical care, moving in and out of care homes, decisions about your day-to-day activities and (if you permit) life-sustaining treatment.
Once you make an LPA, you can amend it or revoke it in its entirety if you no longer require it provided you have the mental capacity at the time of amending or revoking it.
4. Is there a fee to register a Lasting Power of Attorney?
The fee for applying to register an LPA is £82.00. This is per application so if you want an LPA for property and financial affairs and an LPA for health and welfare the fee is £164. This is payable to the Office of Public Guardian (‘OPG’). The OPG protects people in England and Wales who may not have the mental capacity to make certain decisions for themselves, such as about their health and finance.
If you are on certain benefits, you may be able to get a fee reduction or exemption.
If you require a solicitor to complete the forms and make the application, their legal fees will be in addition to the fee mentioned above.
5. What happens if you have no Lasting Power of Attorney and lose capacity?
If you lose mental capacity, unless you’ve already filled in the LPA forms, your loved ones will need to apply through the Court of Protection to become your ‘deputy’. There are two types of deputy; one for property and financial affairs and one for personal welfare. The Court of Protection route can be a long and expensive process with the application fee being £400 per application; if you require both types of deputy the fee is £800.00 in total. The court may decide that there needs to be a hearing before deciding whether to allow the appointment of a deputy; this will clearly lengthen the whole process and there will be a £500 fee for the hearing too.
3 Practical points to consider before making an LPA
1. Act early; if you are thinking about getting an LPA done you can only do so if you have mental capacity.
2. Think about who you want to appoint as your attorney or attorneys. This has to be someone you trust who will have the competence to deal with your affairs in line with your objectives.
3. Speak to your chosen attorney(s) making sure they are happy to take on this responsibility and understand the full extent of the same.
You can find some useful information in our article How protected is your business if something happens to you?. If you would want to know in more detail how to make, register or end a lasting power of attorney, visit the Government website.
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Jigna Vekaria, Solicitor
Please note that the information contained in this article was correct at the time of writing. There may have been updates to the law since the article was written, which may affect the information and advice given therein.