Lasting Power of Attorney - The Missing Link

As from 1st October 2007 the Mental Capacity Act 2005 came into force, affecting a large number of people, their families and advisers. In particular, one of the biggest impacts came with Lasting Powers of Attorney replacing Enduring Powers of Attorney. It is no longer possible to set up an Enduring Power of Attorney, although if you set one up before 1st October this should still be valid provided it was properly executed.

What is a Lasting Power of Attorney?

A Lasting Power of Attorney (LPA) is a legal document that enables you to appoint one or more persons of your choice to handle your financial affairs and property, either now or in the future.

You can also set up a separate LPA which appoints someone to deal with your welfare and personal affairs (i.e. where you live, the care you receive) and even to make decisions about the medical treatment that you receive should you lose your mental capacity. 

Why do you need one ?

Nobody knows what the future holds and situations can arise, such as failing health where you are no longer able to take care of your own affairs. If nothing formal is in place, your assets can go into limbo as no one would be authorised to access them and this can, of course, create difficulties where there are bills to be paid.

Similarly, if you lose your mental capacity, you may wish to nominate somebody to make decisions in relation to your welfare and/or healthcare to ensure your needs are properly looked after.

Who can act as my Attorney?

Anyone who is over 18 years old can be nominated. It needs to be someone you trust implicitly and who will put your needs first. It is quite normal to appoint a trustworthy and responsible member of your family who lives close enough to you to be able to give the necessary assistance. In certain circumstances it can be helpful to appoint solicitors to act as your Attorney, but this and the likely costs of their appointment need to be fully explored before a decision is taken.

Can I have more than one Attorney?

Yes, you can appoint more than one Attorney. If you appoint more than one person to act as your Attorney they can be appointed to act either “together” or “together and independently”.  If they are appointed to act “together”, then this will mean that they all need to act unanimously at all times (for example all signing cheques). If they are appointed to act “together and independently” then any of them can act separately or together. You can even stipulate that your Attorneys must act “together” in relation to certain decisions and “together and independently” in relation
to others.

Can you restrict the powers that you give to your Attorney(s)?

Yes. If you wish, you can restrict their powers to specific acts such as managing your investments, selling your house or simply paying routine domestic bills. Alternatively, if you choose to give them wider powers, the Attorney(s) can do anything which you would have been able to do yourself. You can also include guidance on how they should manage and look after your affairs.

Registration at Court

Your appointed Attorney(s) cannot act upon your behalf until the LPA has been registered at the Office of the Public Guardian (whether or not you are mentally capable). Once registered, your Attorneys are permitted to act upon your behalf should this be desirable or indeed necessary. 

What if you don't make an LPA?

Your family would have to apply to the Court of Protection (which oversees the affairs of people who are not mentally capable of doing so themselves) for the appointment of a Deputy to look after your affairs. This is an inconvenient, long and costly business compared with the ease of thinking
ahead and preparing an LPA now.#

Key Considerations:

Establishing a Lasting Power of Attorney is relatively inexpensive when you look at the alternative of applying to the Court of Protection. Really, it's simply a case of being prepared for what could happen to any of us at any point of our lives.

ACTION POINT

Setting up an LPA is relatively straighforward. Taking action is the key and knowing who to turn to for expert advice on setting one up is crucial. The cost of setting up an LPA is usually between £100 - £200, excluding registration fees. 

If you would like us to refer you to a solicitor, just contact us and we'll give you the details.

# Thanks to Susannah Griffiths of Wall James & Davies solicitors for providing the main content for this article.