Why anyone over the age of 18 years old should have a Lasting Power of Attorney.
What do you think of when someone says, “Lasting Power of Attorney”?
This is what I asked my colleagues in the office recently and the overriding feedback was that it is a legal document for elderly people to use when they have dementia…
Whilst they are not wrong in part, there is a whole lot more to it than that and in this article, I will explain to you the reasons why you should consider registering your own Lasting Power of Attorney.
A Lasting Power of Attorney (“LPA”) can be used for anyone over the age of 18 years and should be.
LPA’s are a legal document which authorises a person to act on behalf and make decisions for another person in specific circumstances. The person who the Power of Attorney belongs to is called the donor and the person or people acting on behalf of the donor are called the attorneys.
Anything can happen to any of us at any time. Having an LPA registered means that if we were to suddenly become incapacitated (mentally or physically) we would have someone authorised to make important decisions on our part. Even something as common as becoming incapacitated because of a broken ankle, could be made easier by having a financial LPA meaning your attorney could attend the bank for you.
In an age where financial dealings and medical decisions are heavily legislated, it is important to understand the advantages of having a registered Lasting Power of Attorney for you and your family.
What is a Lasting Power of Attorney?
There are two types of Lasting Power of Attorney:
- property and financial affairs
Health and Welfare
An LPA for health and welfare must be made whilst the donor has mental capacity but can only be used by the attorneys once the donor can no longer make decisions for themselves because they have lost mental capacity. Health and welfare decisions include future treatment and care decisions but might also include life sustaining treatment decisions. The donor can choose not to allow their attorney to have a right to make life sustaining treatment decisions, it is something that can be excluded in the health and welfare LPA. It is a good idea for a donor to leave their attorneys a non-legally binding letter of wishes regarding the decisions they would like their attorneys to make on their behalf for when the time comes (for example, I wish to be placed into a care home, I wish to receive palliative care at home, etc).
Property and Financial Affairs
An LPA for property and financial affairs must also be made whilst the donor has mental capacity but can be used at any time from it’s registration with the permission of the donor, even if he or she is able to make the decision themselves. A property and financial affairs LPA allows the attorneys to deal with property, bank accounts, investments & bills on behalf of the donor. Whilst the donor has mental capacity, they can choose when they want their attorneys to act on their behalf and it may only be for temporary purposes, eg if the donor has broken their leg and cannot get to the bank, they can hand the attorney their LPA and their attorney can attend the bank on their behalf. The donor is able to be in possession of the LPA and does not need to hand it over permanently to the attorney. A donor may also wish to leave a non-legally binding letter to their attorneys regarding decisions over their finances (for example, I would like you to send £100 to each of my grandchildren on their birthdays up to the age of 18 years).
An LPA needs to be created whilst the donor has mental capacity to understand what they are doing. A donor may choose to have just one or the other type of LPA or they can have both. The LPA will need to be registered with the Office of Public Guardian (the “OPG”).
If there is no LPA in place and a person later becomes unable to make certain decisions, this can have a significant impact because there may not be anyone who is able to make legal decisions for that person or help them gain access to their financial affairs. It could be for something as simple as paying bills to more complex issues regarding health and care decisions. In England and Wales, if a person has lost capacity to make their own decisions the only way for another person to gain authority to make a decision on their behalf is to apply to the Court of Protection which is extremely costly, time consuming and complex.
Who can be appointed?
A donor can choose more than one attorney and they must decide how they want them to act which can be jointly or severally. Acting jointly means the attorneys must always agree on decisions. Acting jointly and severally means the attorneys can all act together but can also act individually. There is also an option to act jointly for some decisions and severally for others.
A donor should choose attorneys who they trust because these are the people who will be making decisions on their behalf when it comes to it regarding health and welfare and financial affairs. Attorneys must be aged 18 years or over and have mental capacity themselves to make decisions about what is best for the donor. The attorneys cannot act if they are declared bankrupt or subject to a debt relief order. Usually, a donor will appoint a spouse (it is a common misconception that spouses have an automatic legal right to access financial information and make health care decisions) and they may also appoint other family members or very close friends. It is also possible to appoint a professional person such as a Solicitor or Doctor although this could be costly for the donor and therefore it is usually family members who are appointed. Attorneys who are appointed in the first instance may be replaced by substitutes should anything happen to them or they do not wish to act later down the line. In this instance, substitutes appointed from the outset can step in, in place of the original attorney/attorneys. If there are no substitutes listed from the outset and the original attorneys cannot act, the LPA is void and cannot be used.
Do I need a Solicitor to get an LPA?
It is not necessary to instruct a Solicitor or professional to assist you with obtaining an LPA, however, it is a good idea to because there are a number of decisions that need to be made when applying for an LPA and taking legal advice will assist you in making those decisions and understanding why you have made the decisions.
There is an opportunity during the application process to notify persons of interest if the donor decides they want to inform anyone, those persons are informed by the OPG before the LPA is registered and this gives the notified persons an opportunity to object to the issuing of the LPA should they wish to. It is up to the donor to decide whether they wish to notify interested parties, for example this may be done where a neighbour or local friend is being appointed as attorney by the donor for location reasons and therefore the donor (and quite likely the attorney) wish to formally notify family members to ensure that there are no questions at a later date when the donor may be unable to explain their decision.
It is also necessary for a certificate provider to sign the LPA before it is registered. A Solicitor is able to sign as a certificate provider along with a list of other possibilities. The LPA needs to signed in a specific order and witnessed, although it is not a difficult process it is a long winded one and applications refused by the OPG will need to be resubmitted with fees payable again (at a reduced rate). Therefore, it is advisable to seek legal advice and help if you are wanting to apply for an LPA.
Written by PC Payroll Solicitor Claire Day
If you would like to discuss applying for an LPA, please contact Claire Day at PC Payroll & Legal on firstname.lastname@example.org or 020 8979 6453.
PC Payroll & Legal are a team of experts who look after running PAYE and pension administration for working families who employ nannies and small businesses.