OLDER and WISER?? The reasons why Lasting Powers of Attorney are so important!! Guidance from specialists Taylor Brown Solicitors.
On a positive note – our generation is healthier, wealthier, living longer and more able to enjoy “the fruits of our labour”.
On the “downside” however, this can unfortunately lead to specific challenges in relation to our health and welfare. As a result of the need to provide for difficulties that arise in our older age, specific planning for the future is an increasingly important area of the law.
“A citizen is permitted to organise his or her affairs so as to mitigate tax liability or maximise benefit entitlement provided that he or she acts within law” (Community Care for Older People, Margaret Richards, 1996).
Historically, in the event of mental incapacity, the only way to manage your affairs was to apply to the Court of Protection for the appointment of a Receiver – now a Deputy. This process was, and remains, expensive and intrusive. The application itself usually takes 2 or 3 months for someone to be appointed as Deputy, and there are a number of detailed forms to be completed. There can also be difficulties prior to sending the application to Court as in-depth medical evidence is needed on behalf of the person who has lost capacity, which can often take time to obtain. The costs for the process including Legal Fees, a Medical Fee and a Court Application Fee are, as a starting point, approximately £2,000. There are ongoing Reporting and Accounting Forms to complete, with annual Court Fees, and where a professional is appointed or assists, these are approximately £1,000 per year.
The government recognised this and for a number of years, it was possible to appoint an attorney to act where mental capacity diminished by means of an Enduring Power of Attorney. This document, if made prior to October 2007, will continue to be valid.
The government perceived two problems with Enduring Powers of Attorney in that:-
- they could only deal with financial and property issues and not declarations of intent concerning health issues
- they were quite easy to fabricate in a situation where someone had already started to lose mental capacity and this had sadly lent itself to a number of incidents of abuse of the system.
From October 2007 in order to appoint someone to manage your decision-making processes after your mental capacity has failed you can now enter into a Lasting Power of Attorney (LPA).
What is a lasting power of attorney?
A lasting power of attorney is a legal document that allows someone to choose other people to make decisions on their behalf when they lack mental capacity to make the decision themselves. It is ‘completed’ in advance of the person losing mental capacity. It is then ‘kept’ until needed. During this period it cannot be used – and the person continues to make decisions themselves. It is then ‘registered’ with the Office of the Public Guardian (OPG) and from this point on it can be used – the other people then being able to make decisions on the person’s behalf. The people chosen to make decisions on our behalf are ‘attorneys’.
There are two types of LPA:
- Health and welfare allowing decisions on treatment, care, medication, where you live.
- Property and financial affairs allowing an attorney to make decisions about paying bills, dealing with the bank, collecting benefits, selling your house.
The benefits of making a lasting power of attorney (LPA)
An LPA allows you to plan in advance:
- the decisions you want to be made on your behalf if/when you lose capacity to make them yourself
- the people you want to make these decisions
- how you want the people to make these decisions
These are distinct advantages over the appointment of a Deputy by the Court of Protection who may limit the decision-making processes of a Deputy. In the event that further powers are required this would necessitate a further application and costs of approximately £1,000.
The approximate costs of making both LPAs are around £1,000 including the application fees. There are no ongoing annual costs, and the attorneys do not have to report each year to the Office of the Public Guardian (OPG). Provided that there are no concerns reported to the Office of the Public Guardian (OPG) the attorneys are free to manage our affairs without government supervision.
Having an LPA is a safe way of maintaining control over decisions made for you because:
- It has to be registered with the Office of the Public Guardian before it can be used (if someone else tries to register it you and your attorney(s) will be able to make an objection).
- You choose someone to provide a ‘certificate’ confirming that you understand the significance and purpose of it.
- You can choose ‘people to be told’ about your LPA when it is registered (so that they have an opportunity to raise concerns).
- Your signature and the signatures of your chosen attorneys must be witnessed.
- If you lose mental capacity at some point – for whatever reason – if you haven’t completed an LPA, other people may need to apply to the Court of Protection to be able to make any decision on your behalf. This can be costly, and can be demanding and stressful for your relatives, friends and carers.
Heath & welfare
Deciding if you want to make and register a lasting power of attorney
A registered health and welfare LPA lets the people you choose make decisions about, for example:
- giving or refusing consent to particular types of health care, including medical treatment decisions
- you staying in your own home, perhaps with help and support from social services.
- you moving into residential housing and choosing the right care home for you.
- day-to-day issues, like your diet, dress, or daily routine.
By choosing who you want to make decisions for you, having an LPA puts you in control of decisions eventually being made on your behalf.
Once a health and welfare LPA has been registered, your attorneys can only make decisions for you when you lack mental capacity to make the decisions yourself.
Property & affairs
Deciding if you want to make and register a lasting power of attorney.
A registered property and financial affairs LPA lets the people you choose make decisions about, for example:
- Buying and selling your property.
- Opening, closing and operating bank/building society accounts, Claiming, receiving and using your benefits, pensions, and allowances.
- By choosing who you want to make decisions for you, having an LPA puts you in control of decisions eventually being made on your behalf.
- Once a property and financial affairs LPA has been registered, your attorneys can start to make decisions for you – both when you have mental capacity and when you lack mental capacity. If you don’t want your attorney(s) to act until you lack capacity, you can put a restriction in your LPA
Unlike the enduring power of attorney the LPA can only be used once it has been registered at the Office of the Public Guardian. (As well as legal charges for acting for you there is a registration fee of £82 payable to them for each LPA you register.) This can be done either because your mental capacity has failed or because you wish the attorney to carry out simple matters appertaining to your general welfare including banking, paying for bills, dealing with institutions and utility companies and other tasks for you due to a mental or physical incapacity or absence on holiday.
Do you have a question about Lasting Powers of Attorney?
If you have a question or need advice about Lasting Powers of Attorney, contact:
The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law and should not be treated as such.
Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission.
Before acting on any of the information contained herein, expert legal advice should be sought.