The Lasting Power of Attorney, LPA is a set of documents that allows me (the donor) to appoint someone I trust (the attorney) to act on my behalf during my lifetime.
Enough of me.
My will is dormant. It’ll come to life when I die (pun intended) – until then, it’s inactive.
Between now and my death, I have an LPA.
The LPA and the will complement each other.
Illness or accident may deprive you or I of our mental faculties and the ability to make decisions for ourselves.
The Two Types of LPA
LPA for Health and Welfare
Health and Welfare LPA can be used to make decisions such as where the donor will live, or what medical, nursing or social care they will receive. The attorney may only use this when the donor has lost mental capacity.
The health and welfare LPA may be used for such thing as:
living and accommodation arrangements, care and medical treatment,
decisions on the application or continuation of medical treatment
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Your lasting power of attorney case study.
LPA for Property and Financial Affairs
The attorney may use this document to make decisions regarding all matters relating to money, property and finances. The attorney may use this when the donor has lost mental capacity. The donor may also instruct the attorney to use the LPA on their behalf – while the donor has the mental capacity to give the instruction.
The property & financial affairs LPA and be used for:
- operating bank accounts
- making investment decisions
- making small customary gifts that have been made at birthdays and Christmastime
- signing tax returns
- completing other routing paperwork
- buying and selling property
- paying the milkman or window cleaner
If Not Now, When?
You can only write an LPA while you’re of sound mind.
You must be past your 18th birthday and, for property and financial affairs, not be an undischarged bankrupt.
Some think LPA are for old people, not so. In my experience, even those of child-rearing age need lasting powers of attorney.
You can imagine the endless horror stories of folk who needed but lacked LPA.
If not now, when?
Too Young for LPA?
By this reasoning, the racing driver Michael Schumacher was too young to have lasting power of attorney. Alas he was only 44 when he had his skiing accident which has left him in a coma for nearly a decade.
The Final Act
You must register your LPA with the Office of the Public Guardian before the attorney can exercise the powers granted by the documents. I used to, as a matter of practice defer registration of powers of attorney till the donor was of advanced years, so in keeping with the sound policy of ‘if not now, when?’ my advice to all who write lasting powers of attorney is to register them now.
When Can an Attorney Act?
The attorney may act on behalf of the donor after the documents have been registered by the Office of the Public Guardian. Correctly draughted lasting powers of attorney may have restrictions, so the attorney must not exceed their powers. The attorney may act till the powers are revoked – by the attorney or the courts.
Attorneys for health and welfare may only act after the donor has lost the mental capacity to make decisions for themselves.
Attorneys for property and financial affairs may act as soon as the documents allow. Many people write their lasting power of attorney paperwork so their attorneys may act even while the donor still has mental capacity to act for themselves. Nonetheless, in such cases, the attorney may only act if they have been instructed by the donor has expressly asked that the attorney act on their behalf.
Why Register the Powers Now I don’t Need them?
I could only answer that question if you or I could predict when we could need the powers – if we could predict when we lose our ability to make decisions for ourselves.
Registering the documents now, while the donor is of sound mind provides the opportunity to respond to the observations, comments and possible rejection by the OPG. The donor may if required simply submit a new set of documents for registration, this would be impossible if the donor had lost mental capacity before the attempt at registration.
The registration process typically takes 6 – 8 months. Why wait?
What Can the Attorney Do?
The attorney may do anything the donor could have done in relation to their finance and property, within the restrictions of the document.
These might include:
Buying or selling property
Operating any bank accounts and similar facilities.
Giving access to the donor’s financial information
Managing the donor’s financial matters including income, expenditure, borrowing, inheritances, taxes and entitlements.
Paying for medical, residential and nursing care including all equipment and services to facilitate such care.
What Can the Attorney Not Do?
The attorney may not act outside the powers expressed in the document they hold.
The attorney may not write or give instructions for a will on behalf of the donor.
The attorney may not engage in inheritance tax planning.
The attorney may not act for the donor as a trustee or executor.
The attorney may not make gifts on the donor’s behalf which the donor had not shown a pattern or history.
The attorney may not profit from their position at attorney, including or claim a salary or income for acting as an attorney.
As an Attorney What Should I Consider?
- You must keep accounts if you handle the donor’s finances.
- You must keep your money separate from the donor’s.
- You may only act within the limits of the powers you’ve been granted.
- You must always act in the donor’s best interests.
- You must leave people to make their own decisions if they can – even if in your judgement they make an unwise decision, after all, you and I everyone around us make unwise decisions every day.
- You must assume the donor can make his or her own decisions until they’ve shown otherwise.
- All actions you perform on behalf of the donor should constrain their rights and freedoms as little as practicable.
- Once you’ve started to act as attorney, you may not relinquish the role without informing the court or the donor. It is good practice to inform the Office of the Public Guardian of your wish to give up having lasting powers of attorney over the donor’s affairs.
When Should an Attorney Act?
How do I decide whether the donor lacks mental capacity to make the relevant decisions? Does the person have an impairment of, or a disturbance in, the functioning of their mind or brain, and, does the impairment or disturbance mean that the person is unable to make specific decisions?
A person is considered to be unable to make a decision if they cannot on a balance of probabilities:
Understand information about the decision at hand,
Retain that information in their mind,
Weigh that information as part of the decision-making, or
Communicate their decision.
What’s an Enduring Power of Attorney, EPA
The Enduring Power of Attorney, EPA the older version of the LPA for property and financial affairs has now been superseded.
The EPA offered few protections to the donor, and for want of a less hackneyed phrase, was good as far as it went. The dreadful pity was that it didn’t go very far.
An EPA that has been draughted can be registered, and a registered EPA can be used, you cannot draught a new enduring power of attorney.
I always recommend folk, if they have the mental capacity to do so, write and register a lasting power even if they have an EPA .
Over to You
If you couldn’t make decisions for yourself, whom would you want to act on your behalf? You’ve a choice, either:
- People you know, love and trust – those emotionally close to you, or
- Officers [deputies] appointed by the courts at great expense and hassle to your family.
If not now, when?
I’ll help you put steps in place while you are currently compos mentis by drafting your lasting power of attorney so that it is the people you know and trust who would step in and decide matters on your behalf.
Other Things I Can Help You With
My Approach to Estate Planning
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Your family’s unique, therefore your estate planning should be unique, no off-the-peg nonsense.
You’re the expert on your family’s matters – every family is special in its own way, therefore I’ll bend my extensive experience to your situation. I can see round corners, so I can spot possible problems and prevent them before they germinate.
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