A lasting power of attorney (LPA)  lets you (the ‘donor’) choose trusted people called ‘attorneys’ to make decisions on your behalf if you need other people to make decisions on your behalf or you are unable to make those decisions yourself because of illness or mental incapacity.

The LPA was created under the Mental Capacity Act 2005, replacing the former Enduring Powers of Attorney (EPA).

There are two types of LPA :

  • Property and Financial Affairs LPA: Allows your attorney to manage your finances, property, and business matters. You do not have to be incapacitated for your attorneys to act under these powers. You may instruct them to act on your behalf.
  • Health and Welfare LPA: Allows your attorney to make decisions about your medical care and welfare: by these powers your attorney may only act if you are unable to speak for yourself. 

Let’s help you understand how to establish and use the lasting powers of attorney as well as their limitations

When Does a Lasting Power of Attorney Take Effect?

As the donor (the person creating the LPA), you decide when the LPA should take effect. 

Two main options for when an LPA takes effect:

  1. Immediate activation upon registration – The LPA takes effect as soon as it’s registered with the Office of the Public Guardian, allowing your attorney to act on your behalf right away. I generally advice this, as the document is more useful. I will discuss this further below.
  2. Activation upon loss of mental capacity –  The LPA would only be useable if the donor has lost the capacity to act on their own behalf.

 Why I recommend immediate registration 

In the first, the lasting power of attorney is a form of insurance, insurance that illness or lack of mental capacity would not be bar to the people who most have your interests at heart, can act on your behalf. All insurance is best obtained when the prospect of the requirement is not on the horizon.

Immediate registration guarantees that the document would be accepted at registration and any errors [or silly questions] can be made good while you have your wits about you and don’t yet need the attorney to act on your behalf.

When Should I Register a Lasting Power of Attorney?

The short answer: Now.

I have known people delay registration of their LPA because it defers the payment of the registration fee. This is false economy.

Just like a mobile phone with a dead battery, an unregistered LPA is dead weight. An unregistered LPA is at best evidence of good intentions. You know that saying about the road to Hades being paved with good intentions.

How long does registration for LPA take?

Assuming all is in order with the application, it would take eight to thirteen weeks to register the power of attorney.

When Does an LPA Expire?

Unlike a passport or driving licence, an LPA does not expire. Unlike a bank account or debit card, an LPA does not expire. The LPA remains in force till your death, unless one of the following things happens 

An LPA becomes void or is revoked when:

  • You may cancel your power of attorney at any time. As long as you have sufficient mental capacity for the action, simply write to the Office of the Public Guardian declaring your intention to cancel the document.
  • You may also partially revoke the document by removing one attorney only.
  • An attorney dies, loses mental capacity, divorces the donor (and if the document does not specify otherwise), if the attorney becomes bankrupt (for property and finance LPA only), and no replacement attorney can step in under the terms of the document.
  • The Court of Protection removes an attorney or revokes the LPA.

Why Do I Need a Lasting Power of Attorney?

If I visited my local GP’s surgery today, as I have my wits about me, I can request you or any friend or member of my family be present at the consultation. I can make decisions on my care and treatment, and at my invitation, you might make interventions.

But imagine I couldn’t speak for myself because of illness or loss of mental capacity.

The surgery staff would be protecting me by turfing you out of the consultation. Medical staff would keep you out irrespective of the intimacy of our relationship, whether you were my spouse, parent, best friend, or even my ‘next of kin’.

The same applies to my finances. Imagine I were unable to conduct my financial affairs through illness, infirmity, or simple absence.

Absence might sound trivial, but consider this: in April 2010, the Eyjafjallajökull volcano erupted in Iceland. For eight days, UK and European airspace closed, stranding travellers worldwide.

The 2020 lockdowns did the same. People abroad couldn’t get home. Bills still needed paying. Decisions still needed making. But without an LPA, no one had authority to act.

Without an LPA, your family members have no authority to make decisions on your behalf or manage your finances. 

With an LPA, you maintain control over who makes decisions for you and what decisions they can make. Without one, this control is out of your hands. You’d be in the system.

Can a Married Couple Get a Joint LPA?

No. There is no such thing as a joint lasting power of attorney. 

For most purposes, notwithstanding the intimacy of the relationship, including drafting and holding lasting powers of attorney, the parties to a marriage or civil partnership are treated as individuals. Think of it as living on a what’s yours is yours, and what’s mine is mine basis.

Therefore, each of them must create their own separate LPA document. 

Although there is no such thing as a joint LPA, when people own assets together, especially land and buildings on the one hand and bank accounts on the other hand, each party to the union, even if they are married to each other, must make an LPA. The LPA would allow anyone of their choice including a spouse to act on their behalf.

Just like a [without a will] spouse, or partner does not automatically inherit a deceased person’s assets, a spouse or partner has no right to act on behalf of another person.

This is redundant, but it goes to illustrate the point – walk into your local bank and ask to take money out of your spouse’s account. You might count yourself fortunate that the bank staff did not call the girls and boys in blue.

Note: If you’re married or in a civil partnership, your spouse or civil partner does NOT automatically have the legal authority to make decisions about your finances or health and care if you lose capacity. Without an LPA, they would need to apply to the courts.

What is the Office of the Public Guardian’s Role?

1. Register All Lasting Powers of Attorney

The Office of the Public Guardian, OPG maintains the central register of all lasting powers of attorney. LPA created in England and Wales. When you send your LPA forms to the OPG with the registration fee, they: check all the rules on the creation of the LPA have been followed and register the document.

2. Investigate and Take Action Against Abuse

If the OPG believes the attorney’s actions are against the donor’s interests, it may:

  • investigate allegations of mistreatment or fraud, 
  • restrict or revoke the LPA 
  • report concerns to the police or social services offices as appropriate.

When Do the Attorney’s Powers Begin?

For Property and Financial Affairs LPA, the donor has a choice of when such powers may be exercised. 

  • The  LPA may be draughted so that it may useable as soon as it is registered. I find this the more useful way to use the document. Remember the travel restrictions we talked about earlier, a lasting power of attorney would be ideal in such situations. 
  • The second option in draughting an LPA would be to make it useable only when the donor has lost mental capacity. I find this less useful

Restrictions on an attorney’s power to act:

  • Bankruptcy bars an attorney from acting – If an attorney appointed for property and financial affairs became  bankrupt, they lose the power to act as an attorney. Immediately. They would have to give up the role by informing the OPG.

For Health and Welfare LPA, an attorney appointed for health and welfare decisions can ONLY act when the donor has lost the capacity to speak for themselves. 

What Can an Attorney Do?

Subject to any restrictions, conditions, or guidance  as may appear in the Power of Attorney document, an attorney will be able to make almost all the decisions about property and financial affairs that you would have made.

Decisions an attorney for property and financial affairs can make include:

  • The operation of bank and building society accounts
  • Making and managing investments, subject to special rules
  • Claiming, receiving, and spending pensions, benefits, and allowances
  • Management of household finances and payment of care bills
  • Property purchase and sale (with restrictions)
  • Providing legal and financial advice
  • Operating business accounts and making business decisions
  • Paying taxes and submitting tax returns
  • Arranging repairs and maintenance to property
  • Obtaining professional services

Special rules apply to property sales because most of the time, the single most valuable asset in an estate is the family home, and there is potential for the attorney to abuse their position. 

Decisions a health and welfare attorney can make include:

  • Where you live and what kind of accommodation you have
  • Your medical treatment and consent to or refusal of treatment
  • Your diet and daily care routines
  • Your social activities and hobbies
  • Whether you receive visitors

What Can’t an Attorney Do?

An attorney cannot:

  • Do things you did not do, including giving assets, making gifts, or donations to new parties not previously supported
  • Engage in inheritance tax planning on their own initiative 
  • Sell property at a discount to themselves or others without special authority
  • Change your will or create a new one
  • Do anything you wouldn’t reasonably have done
  • Take any action that’s not in your best interests
  • Make certain types of healthcare decisions (such as refusing life-sustaining treatment) without a Health and Welfare LPA with specific powers

An attorney must always act in your best interests and follow the principles set out in the Mental Capacity Act 2005. They should:

  • Assume you have capacity unless proved otherwise
  • Take all practicable steps to help you make decisions
  • Not treat you as lacking capacity just because you make unwise decisions. We make unwise decisions anyway
  • Make decisions in your best interests
  • Consider whether the decision could be made in a way that’s less restrictive of your rights

How Many Attorneys Should I Appoint?

The minimum number of attorney necessary is one, but it is advisable to appoint either one attorney with a replacement attorney, or two attorneys. If you appoint only one attorney and that person becomes unable or unwilling to act (whether through death, illness, loss of mental capacity, or simply deciding they don’t want the responsibility), the entire arrangement collapses. Your affairs would be in the hands of outsiders. 

How many attorneys can you appoint?

There is no limit to the number of attorneys you may have, although no more than five ‘people to be notified’ may be designated.

However, you must specify how these attorneys will make decisions together.

How Attorneys Act: Jointly & Severally

When two or more attorneys are appointed jointly and severally, any one of the attorneys may make decisions independently, and all the attorneys would be bound by and responsible for the decision.  

This means:

  • Any attorney can act alone without consulting the others
  • Each attorney is answerable for all decisions made by any of the attorneys
  • This arrangement provides flexibility and speed 

Advantages:

  • If any attorney is unable, or unwilling to act, or has died, the other attorneys can continue acting in the interests of the donor.
  • Faster decision-making
  • No delays if one attorney is unavailable
  • Flexible arrangements
  • Good for urgent decisions 

Disadvantages:

  • Risk of attorneys acting at cross purposes to one another

I liken attorneys acting jointly and severally to my other half and I running a credit card account jointly. The card issuer isn’t interested whether I buy gourmet chocolate and slimming pills, or whether my lady  buys first edition books. The card issuer’s only concern is that the account isn’t abused and payments, including interest, are made as due. 

In short, I’m taking responsibility for her  spending, as she is for mine. We don’t have to be in the same room when the card is being used. Like Shylock, the card issuer simply want as it is due. 

How Attorneys Act: Jointly

When attorneys are appointed jointly, they must agree on all decisions 

This creates potential for paralysis as every decision must be unanimous.

You may specify that your attorneys act jointly and severally for some matters and jointly on others.

What Financial Compensation Can an Attorney Claim?

Think of it this way, while anyone such as friends and family may give driving lessons, only approved driving instructors (or trainees) may charge for providing driving tuition.
Other than a professional attorney, and, professional attorneys may only be appointed for property and financial affairs, attorneys may not charge for acting as attorney. 

Even professional attorneys, folk who work as attorneys in their day jobs may not charge if there is no clause in the power of attorney that permits it. 

Who CAN charge for acting as an attorney:

Only professionals such as solicitors, accountants, estate planners and professional deputies appointed by the court

What a lay (non-professional) attorney may claim:

A lay attorney may claim only out-of-pocket expenses such as:

  • Travel costs
  • Telephone costs
  • Postage costs
  • Printing and copying costs
  • Professional fees 

These expenses must be:

  • Necessary and reasonable
  • Related to acting as attorney
  • Claimed from  the donor’s funds.
  • Documented with receipts

There is one exception to the no-payment rule, which is when the courts authorise payment. Often this is a steep hill to climb.

The Attorney May Not  

  • Charge wage/salary, fees, or honorarium where the LPA is silent.
  • Charge for “carer” or domestic services supplied personally by the attorney unless expressly permitted by the LPA or authorised by the court. Even where permitted, the attorney must be like Caesar’s wife, above all suspicion
  • Make “gifts” to the attorney framed as remuneration (outside the narrow statutory gifting power – more of which later). Such payments risk being treated as unauthorised gifts and may lead to investigation, recovery, or removal.

What Gifts Can an Attorney Make?

An attorney has slender powers  to make gifts on your behalf. 

What gifts an attorney CAN make:

An attorney may only make gifts:

  1. At birthdays and traditional festivals – The attorney can continue your established pattern of giving gifts for occasions like birthdays, Christmas, Eid, Diwali, or other significant dates.
  2. Only if you had a demonstrable history of making similar gifts – The attorney cannot start making gifts to new people or in new patterns. The attorney may not undertake inheritance tax planning on their own initiative. 
  3. In proportion to your assets – The gifts must be reasonable in value compared to your overall wealth. 
  4. Of similar value to previous gifts – New gifts should be roughly the same value as those you previously gave.

What gifts an attorney CANNOT make:

  • Gifts to new beneficiaries not previously supported
  • Gifts substantially larger than previous gifts
  • Gifts to the attorney or the attorney’s family (unless previously done)
  • Any gift that’s not in your interests

Conclusion

Draughting and registering lasting powers of attorney now, while you have mental capacity to do so is a fundamental part of estate planning and protecting your and your family’s interests.