A Lasting Power of Attorney is the legal document required to give someone else authority to make decisions on your behalf should there come a time when you cannot make these decisions for yourself i.e. because you have lost mental capacity.

There are two types of LPA:

• Property & Financial Affairs
• Health & Welfare

You can have either or both types of Lasting Power of Attorney.

If you do not prepare Lasting Powers of Attorney and then go on to lose mental capacity your family, friends or social services may need to make an application to the Court of Protection for the appointment of a Deputy to make decisions on your behalf – this is both costly and time consuming.

What is a Property and Affairs Lasting Powers of Attorney?

A Lasting Power of Attorney for Property and Financial Affairs is the legal document required to give authority to another person(s) to make decisions on your behalf about your property and finances.

You, as the donor, grant the Lasting Power of Attorney in favour of the Attorney(s) to enable them to make decisions about your property and finances if there comes a time where you lack the capacity to make those decisions yourself.

A Property & Affairs Lasting Power of Attorney can also be used when you do have mental capacity, with your consent – for example, if you were in hospital or housebound and needed your Attorney to deal with something at the bank on your behalf.

What is a Health and Welfare Lasting Powers of Attorney?

A Lasting Power of Attorney for Health and Welfare is the legal document required to give authority to another person(s) to make decisions on your behalf about your health and welfare.

A Health & Welfare Lasting Power of Attorney can only be used by your Attorneys to make decisions on your behalf if you have lost mental capacity to make them for yourself.

Who should I appoint as an Attorney?

It is important to think carefully about who you would like your Attorney(s) to be as they will have authority to manage and make decisions in relation to your finances and health. It is important that they are trustworthy, honest and capable of acting with integrity – though they don’t actually need any specialist skills to carry out the role. It can be anyone who is aged 18 or over and who has mental capacity, is also important that they are not bankrupt.

If you are not able to identify family or friends who could act as your Attorney, then you can appoint professionals such as solicitors or accountants, but they will likely charge for their services.

You should also consider practical issues such as whether it would be better to have an attorney who is geographically close to you, though this might be less relevant, for example for an Lasting Power of Attorney for Property & Affairs, if you deal with all of your finances online. You should also consider the time, skills and expertise that each attorney has in relation to what they may need to do. If you choose to appoint professional attorneys you will need to pay them for acting as attorney, but you can also pay other attorneys if you wish.

How many Attorneys should I have?

You can appoint up to four Attorneys, and up to four Replacement Attorneys should any of the original Attorneys die or be unable or unwilling to act.

Four Attorneys is quite a lot of Attorneys to have, so you may wish to consider having two Primary Attorneys and two Replacement Attorneys, to keep the logistics simple.

If you appoint more than one Attorney, then you should consider whether they can work well together. If there is a high degree of possibility that they will fall out and not be able to agree on matters, then you may wish to rethink the choice of Attorney.

How will my Attorneys Act?

Where there is more than one Attorney, you will need to think about whether you want them to act jointly (together for all decisions) or jointly and severally (together or alone) or jointly for some decisions and severally for others.

A joint appointment will mean that the Attorneys always need to act together, which could be tricky if one of them was to be unavailable due to a holiday, work or their own health. Additionally, if one of them was to die then the other would not be able to continue acting. Your Replacement Attorneys would need to step if, or if there aren’t any, then you will need to re-make the Lasting Powers of Attorney. Having said that, there are occasions where it would be sensible to appoint the Attorneys on a joint basis.

A joint and several appointment is a little more flexible in that the Attorneys can act alone or together in making their decisions. Whilst this is more flexible, it is not always appropriate so it will need to be considered in light of your personal circumstances. The flexibility will make it easier for the Attorney to continue managing your affairs should one of them be unavailable or have died.

Appointing the Attorneys jointly for some decisions and severally for others is a hybrid of the other two options, which offers security and flexibility. The Lasting Powers of Attorney will need careful drafting so that it is clear as to which decisions are to be made together and which can be made by an individual Attorney.

Life Sustaining Treatment – Health and Welfare Only

The donor must decide in section 5 of the Lasting Power of Attorney, whether or not the Attorney(s) can give or refuse consent to life-sustaining treatment on their behalf, or whether they would prefer that the doctors simply consult the family more generally without giving extra weight to the view of the Attorney(s),

Life sustaining treatment could range from a course of antibiotics to artificial nutrition and hydration.

Can I deal with the donor’s business interests? – Property & Affairs Only

An Attorney can generally deal with the donor’s business interests under a Lasting Power of Attorney, but it is important to check the instructions in section 7 in case there are any limitations on this authority.

A Director of a company cannot delegate their powers and responsibilities to an Attorney unless the Articles of Association of the company specifically allow it – again this is something to be checked.

How can I control what my attorneys can and cannot do?

Restrictions imposed by law

The law limits what your attorneys can do and how they must act. The most important rule is that an attorney is only allowed to act in your best interests. Another important rule for an attorney for financial decisions is that they must keep accounts and submit them to the Office of the Public Guardian (OPG) on request.

Other rules include:

• Strict limits on the kinds of gifts that an attorney for financial decisions can make on your behalf. For example, they can give birthday, Christmas and wedding presents but they can’t make gifts for inheritance tax planning or pay school fees for grandchildren without making an application to court.
• The law against euthanasia and assisted suicide. Your attorney cannot break the law even if you try to allow them to do so in your LPA for health and care decisions.

Donor’s instructions

The donor may provide additional instructions that you must follow when considering making decisions in the ‘instructions’ box in section 7 of the Lasting Power of Attorney. It is important to make sure that you are familiar with these instructions before you start acting under the Lasting Power of Attorney, and if you have any questions about the instructions then you may wish to consult with the donor when you sign the Lasting Power of Attorney (as they will still have mental capacity at this point).

Some common instructions might include the submission of accounts to a person of the donor’s choice, the payment of fees or consultation with a third party.

Donor’s preferences

The donor may provide additional preferences that you may follow when considering making decisions in the ‘preferences’ box in section 7 of the Lasting Power of Attorney. It is important to make sure that you are familiar with these preferences before you start acting under the Lasting Power of Attorney, and if you have any questions about the instructions then you may wish to consult with the donor when you sign the Lasting Power of Attorney (as they will still have mental capacity at this point).

Some common preferences might include the ability for the Attorney to have access to the donor’s Will, to make financial provision for a spouse or other dependent or to obtain information from the NHS or the Local Authority relevant to a financial decision.

How do I make a Lasting Power of Attorney?

It is important that you seek legal advice before preparing your Lasting Powers of Attorney to ensure that they are tailored to your individual needs and to ensure that they give your Attorneys all the powers they are going to need.

Once the forms have been drafted, you will need to sign them, along with your Certificate Provide and the Attorneys. All signatures (apart from the Certificate Provider’s) need to be witnessed by an independent witness aged of 18 years and who has mental capacity.

It is also important that the forms are signed in the correct order, or they will not be valid.

In order to actually use the Lasting Power of Attorney, it must be registered with the Office of the Public Guardian (see below).

The Attorneys will then need to present the registered Lasting Power of Attorney, along with themselves and their ID at the banks and other financial organisations.

People to notify

When you make your Lasting Power of Attorney you can, but don’t have to, nominate up to five people to be told when you or your attorney(s) apply to the Office of the Public Guardian for the Lasting Power of Attorney to be registered. Any people that you specify should be people who are involved in your life and who know you well. The notification acts as a safeguard because it allows those people to raise any concerns that they may have at the point of registration.

What is a Certificate Provider?

The Certificate Provider’s role is to confirm that you have mental capacity and that you understand the Lasting Power of Attorney documents and the powers that you are granting in them, and to confirm that there is no fraud or undue influence from third parties pressurising you into preparing the Lasting Power of Attorney.

The Certificate Provider will usually be the solicitor preparing the documentation for you, but if there any concerns regarding your mental capacity then your GP may carry out this role.

A certificate provider is an impartial person who is qualified to act in one of two ways:

• They are a professional (for example, a GP or your solicitor).
• They have known you for at least two years.

You need one certificate provider.

A certificate provider must be independent. For example, it is not possible for any of your attorneys, a member of your family or a member of an attorney’s family to act in this capacity. The LPA form contains a full list of those who cannot act as a certificate provider.

When completing and signing the form, the certificate provider will be certifying that:

• You understand the meaning of the LPA.
• You have not been put under pressure to make the LPA.
• There has been no fraud involved in making the LPA (that is that there is no dishonesty or scam involved).
• There is no other reason for concern.

Again, the certificate is a safeguard for you because it is confirmation from a qualified third party that you understand what you are signing and that you have decided to make it yourself, without pressure from others.

What are my duties as an Attorney?

Section 8 of the Lasting Power of Attorney explains the legal rights and responsibilities of an Attorney acting under a Lasting Power of Attorney. It explains that the duties of an Attorney are governed by the Mental Capacity Act 2005 and the Code of Practice.

The most important duty is to always act in the donor’s (the person who granted the Lasting Power of Attorney’s) best interests.

Some of the decisions that Attorneys may need to make may include paying bills, operating bank accounts, placing and managing investments and buying and selling property.

If the Lasting Power of Attorney allows for some decisions to be made whilst the donor has mental capacity, then this does not mean that there is a blanket authority to make decisions, but rather that the Attorney has the authority to make decisions in relation to the particular matters they have consented to at that time. This can be helpful if the donor is unwell or is on holiday for an extended period.

What are the Rights and Responsibilities under a Lasting Power of Attorney?

Section 8 of the Lasting Power of Attorney sets out the legal rights and responsibilities and explains that Lasting Powers of Attorney are governed by the Mental Capacity Act 2005 and the Code of Practice.  Section 8 sets out five key principles:

• Your Attorneys must treat you as being able to make your own decision, unless it is established that you cannot do so.

This means that you must assume that the donor has the mental capacity to make financial decisions and consider each decision as the donor makes it, giving support to the donor to make the decision, if able to do so.

• Your Attorneys must help you to make as many of your own decisions as you can. They must take all practical steps to help you make your own decisions. They can only treat you as unable to make a decision if they have not succeeded in helping you through those steps.

Some people need help to make or communicate a decision. For example, you may need to help the donor with non-verbal communication (for example, writing down a decision or communicating by sign language) or provide relevant information in a more accessible format. The donor may have fluctuating capacity so there might, for example, be a particular time of day when it is best to try to help the donor to reach a decision.

• Your Attorneys must not treat you as being unable to make a decision simply because it is an unwise decision.

It is important to recognise that the donor is an individual who may have different beliefs, values and attitudes to you. This means that just because the donor makes a decision that you may not have made, it doesn’t necessarily mean that they lack mental capacity to make it.  

• Your Attorneys must act and make decisions in your best interests, when you are unable to do so.

This is the most important principle and should underpin every act you take and decision you make.

• Before your Attorneys make a decision or act for you, they must consider whether they can make the decision or act in a way that is less restrictive of your rights and freedoms but still achieves the purpose

Is there anything else that the Attorneys can do to help you to make the decision?

Mental Capacity Act 2005 is supplemented by the Mental Capacity Act Code of Practice. You are legally obliged to consider the Code of Practice, which contains helpful guidance for attorneys and explains how the principles should be applied in practical scenarios.

You may find it useful to read Chapter 7 of the Code of Practice before taking up your appointment (see www.gov.uk/government/publications/mental-capacity-act-code-of-practice).

Can I be paid for being an Attorney?

You can recover all your reasonable out-of-pocket expenses from the donor such as travel expenses, postage and telephone calls.

However, you can only receive fees for acting as an Attorney if the donor has expressly authorised payment in the instructions section of the Lasting Power of Attorney. If you do not want to take on the role of attorney without payment, you should discuss this with the donor and check the Lasting Power of Attorney form carefully before signing.

It is unusual, though not unheard of, for a lay (friend or family member) to be paid for acting as an Attorney, and it tends to be Professional Attorneys who will charge.

Attorney Record Keeping

You should keep accounts, receipts and records of financial transactions made on behalf of the donor. The Office of the Public Guardian (OPG) may ask you to produce these at any time.

You must keep your own finances completely separate from those of the donor.

Can I make gifts as a Property & Affairs Attorney?

There are strict limits on the kinds of gift that you can make on the donor’s behalf. You can make reasonable birthday, Christmas and wedding gifts provided that they are proportionate to the donor’s financial resources. You should also consider what sorts of gifts the donor made in the past themselves, and any preferences or instructions in the Lasting Power of Attorney document itself.

There are certain gifts that you cannot make without Court authority, such as gifts to mitigate inheritance tax, paying school fees or even selling a property to you or a family member at less than market value.

When considering gifts you should consider seeking advice from a specialist and/or guidance from the Office of the Public Guardian.

Do I owe a Duty of Care?

If you are an unpaid attorney, you must apply the same care and skill that you would use to make decisions about your own finances.

Attorneys who are paid for their services, or claim to have particular skills or qualifications, must show a higher degree of care and skill.

Nevertheless, you must also ensure that you:

• do not place yourself in a position where your own personal interests conflict with those of the donor, or where there is a real possibility that this will happen.
• do not receive any unauthorised profit from your position as attorney.
• keep the affairs of the donor confidential.
• do not delegate your authority as attorney to anyone else, although you may take professional advice (for example, from an investment manager, if the donor has given express authority in the instructions box in section 7 of the LPA).
• act with honesty.

Will I be supervised?

The Office of the Public Guardian are responsible for supervising Attorneys. If concerns are raised, the Office of the Public Guardian may investigate and if necessary, remove an Attorney through the Court of Protection.

Anyone with concerns about an Attorney (even a Co-Attorney) should consider raising their concerns with the Office of the Public Guardian.

What if things go wrong?

If you act in accordance with your legal duties and, in particular, in the best interests of the donor, then it is unlikely that you will be criticised for any decisions that you made on behalf of the donor.

If you act under a registered Lasting Power of Attorney that turns out to be invalid, you will not incur any liability (to the donor or anyone else) unless:

• You knew that the LPA was invalid.
• You were aware of circumstances that would have terminated your authority to act under the Lasting Power of Attorney, if it was valid.

If you have acted improperly:

• You may need to pay the donor money to compensate for the donor’s loss.
• In the case of ill-treatment or wilful neglect of the donor, an attorney can be found guilty of a criminal offence punishable by a fine or imprisonment of up to five years.
• You could be charged with fraud.

Registration

You or the donor can register the Lasting Power of Attorney with the Office of the Public Guardian at any time. It is advisable to register the Lasting Power of Attorney as soon as it has been made, in case there are any problems with it, as these can be addressed whilst the donor still has mental capacity.

This does not mean that the Lasting Power of Attorney needs to be used right away. It can simply be filed until a future date. Registering at this point also ensure that there are no lengthy delays at a later date as a result of waiting for the registration – which at present is taking 20 weeks.

To register the Lasting Power of Attorney, the donor or attorney(s) must sign the registration part of the Lasting Power of Attorney form (at the end) and give notice using an LP3 form to anyone that the donor has specified as “people to be told”.

If you are applying for registration and are appointed as joint attorneys, all the attorneys must add their details and sign the registration part of the form. If you are appointed as joint and several attorneys, only one attorney need add their details and sign the registration part of the form.

The OPG charge a registration fee of £82, which is payable from the donor’s funds. In cases of financial hardship, a lower fee may be charged, or the fee waived.

Advantages of immediate registration

The advantages are that:

• The OPG checks the LPA when it is about to register it so any problems will be found immediately. If the LPA is not registered until you have lost capacity, you won’t be able to rectify any errors and the LPA may be invalid. That is, your attorney(s) will not be able to use it.
• The LPA is ready to use if it is needed in the future. As the registration process can take eight to ten weeks, delaying registration until you lose mental capacity can cause an inconvenient delay when the LPA is required.

Disadvantages of immediate registration

The disadvantages are that:

• The registration fee of £82 per LPA must be paid straight away.
• Over time, you may decide that you want to revoke your LPA and make a new one. If you have already registered your LPA, you will need to pay a second registration fee to register the new LPA.

Checklist

This section contains a checklist of the decisions you will need to make before creating a lasting power of attorney.

• Which type of LPA do you want to make?
• Who will act as your attorney(s)?
• If you have more than one attorney, how will they work together to make decisions?
• If you are making an LPA for financial decisions, whether you want your attorney to be able to make decisions while you still have mental capacity?
• If you are making an LPA for health and care, whether you authorise your attorney(s) to make decisions about life sustaining treatment.
• Do you want to place any extra restrictions on what the attorney(s) can do?
• Do you want to specify any preferences to your attorney(s)?
• Do you want anyone to be notified when your LPA is about to be registered? If so, who?
• Who will act as your certificate provider(s)?
• Do you want to register your LPA immediately?

What happens if I need more than one copy of the Lasting Power of Attorney?

You should avoid sending the original registered Lasting Power of Attorney by post to a third party. You should therefore offer to supply an office or certified copy instead.

You can get office copies from the Office of the Public Guardian at a cost of £35 per document.

Alternatively, a solicitor or accountant can certify a copy of the Lasting Power of Attorney.

How does my appointment as Attorney end?

When the donor dies, the Lasting Power of Attorney automatically comes to an end. You will need to send the original Lasting Power of Attorney (and any copies) with the death certificate to the Office of the Public Guardian for cancellation as soon as possible.

Giving up your appointment

You can decide to stop acting as an Attorney at any time. If the Lasting Power of Attorney is registered, you must complete form LPA005 and send the original to the donor. You must also send a copy to the Office of the Public Guardian and to any other Attorneys named in the Lasting Power of Attorney. If you are the only Attorney, you should send a copy to any Replacement Attorneys named in the Lasting Power of Attorney.

 

For further information regarding the above or if you would like to discuss a Wills & Probate related query with one of the team, please call us on 0800 011 6666 or e-mail the team at legal@timms-law.com.