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Lasting Power of Attorney

Appointing Others to Act on Your Behalf

The Mental Capacity Act 2005 came into force on 1st October 2007 and introduced Lasting Powers of Attorney. This has replaced the Enduring Power of Attorney as the type of power of attorney that can be used after a person loses capacity to make decisions.

A Lasting Power of Attorney (LPA) enables a person aged 18 or over (the Donor) to appoint another person or persons (the Donee or Attorney) to act on their behalf and make decisions for that person. The person making the LPA can chose to delegate to Attorneys decisions relating to personal welfare – including health care and medical treatment decisions – as well as decisions regarding property and financial matters.

Types of LPA

There are two different types of LPA:

Property and Affairs LPA

A Property and Affairs LPA can be used to appoint Attorneys to make decisions about financial issues, for example operating a bank account, buying and selling property, paying care home fees, making investments, and dealing with tax affairs and benefits.

Personal Welfare LPA

A Personal Welfare LPA will enable an Attorney to make decisions about an individual’s welfare and health, for example where the person should live, day to day care including diet and dress, the medical treatment to be received, and the giving or refusing of consent to life sustaining medical treatment. The Attorney can only use the Personal Welfare LPA if the Donor has lost mental capacity to make the relevant decisions.

An LPA will enable the Donor to give specific instructions to the appointed Attorneys, either by giving them general authority to act or limiting their authority to specific acts.

Appointment of Attorneys

An Attorney will have a responsible role and it is important that careful consideration is given to appointing someone who can be trusted to act in the Donor’s best interests. Attorneys should have some understanding of what is expected of them and how and when they are to act when required to do so. The scope of the Attorney authority should be discussed with the Attorney and any relevant health professional, if appropriate.

More than one Attorney can be appointed. It is sensible to appoint more than one Attorney so that if one dies or is unable to act the other can continue to act.

The LPA will enable the Donor to give instructions as to how the Attorneys will make decisions on the’ Donor’s behalf; state whether the Attorneys are to act together in taking some decisions, but separately for others; appoint replacement or substitute Attorneys; and chose who, if anyone, should be notified on registration of the LPA.

The Certificate Provider

A certificate of capacity is required from an independent person, known as the Certificate Provider, at the time of signing of the LPA. The Certificate Provider must discuss the content of the LPA with the Donor, preferably without anyone else present, to ensure that, in their opinion, the Donor understands the purpose and scope of the power, that no undue pressure or fraud is involved in the decision to make the LPA, and there is nothing else to prevent the LPA being created.

Registration

The LPA must be registered with the Office of the Public Guardian before it can be used, whether or not the Donor has mental capacity. However, it should be noted that a Property and Affairs LPA can be used while the Donor still has mental capacity, while a Personal Welfare LPA can only be used if the Donor no longer has capacity to make a particular decision affecting their health or personal welfare. In addition to any legal fees, there will also be a court fee to register the LPA of £150. It may be necessary to notify certain people named in the LPA of the intended registration using prescribed forms,

There are therefore two choices open to the Donor:

  1. not to register the LPA but to keep it in store until such time as it is required. At that stage it can be registered which will take between 6-8 weeks before it can be used, or
  2. the LPA can be registered and used immediately after registration has been completed.

Code of Practice

A Code of Practice has been produced to support the legal framework of the Mental Capacity Act 2005 which provides guidance to anyone caring for or working with adults who lack capacity. An Attorney appointed under an LP A is under a duty to have regard to the Code of Practice, however, an Attorney appointed under an Enduring Power of Attorney does not have this duty unless the Attorney is a professional person, in which case the Attorney will be under a duty to observe the code once the Enduring Power of Attorney has been registered.

Gifts

A question often raised by Donors and Attorneys is whether or not an Attorney has power to make gifts out of the Donor’s estate during the Donor’s lifetime ‘to members of the family or others. Gifts are not permitted to be made by the Attorney unless:

  • The recipient of the gift is an individual who is related to or connected with the Donor or a charity to which the Donor actually made gifts or might be expected to make gifts.
  • The timing of the gift must be of a seasonable nature or made on the occasion of a birth or marriage/civil partnership or the anniversary of a birth or marriage/civil partnership.
  • The value of the gift must not be unreasonable having regard to all the circumstances and in particular the size of the Donor’s estate.
  • The Donor can totally restrict or exclude the ability of the Attorney to make any gifts or limit them.

If a gift is to be made outside the above circumstances, the Attorney will have to make an application to the Court of Protection for an order giving consent to the making of the gift. The Court can authorise Attorneys to do such acts as to benefit themselves or otherwise provided there are no restrictions in the LPA itself and the Court is satisfied that this would be in the Donor’s best interest. If a gift necessitating an application to the Court is required, you are advised to contact the Court of Protection Team at The Will Consultancy.

Cancellation of an LPA

A LPA can be revoked (cancelled) at any time so long as the Donor has mental capacity. The LPA is revoked by the Donor signing a Deed of Revocation and informing the Attorneys and the Office of the Public Guardian. If the LPA has been registered with businesses and organizations with which the Donor or the Attorney has had dealings, they should also be notified of the revocation so that they are aware that the Attorney is no longer authorised to act on the Donor’s behalf.

The benefits of making an LPA

There are a number of benefits in making an LPA, particularly if the Donor is advancing in years, in ill-health, being admitted into a care home, travels abroad regularly or is involved in a business.

 The alternative can be costly and time consuming. If the Donor has not appointed an Attorney and becomes mentally incapable, relatives or some interested person would have to apply to the Court of Protection for a Deputy to be appointed to manage the Donor’s property and affairs.

This will entail obtaining a medical certificate of the Donor’s capacity, the completion of a number of lengthy forms and a Hearing before a Deputyship Order can be issued. There will be a Court fee for submission of the application and an additional Court fee for any other ancillary application. There are ongoing costs to pay including an annual administration charges which could be up to £800 a year, and the Deputy will have to prepare annual accounts to file in Court and pay a fee.

In most cases, a solicitor will be instructed to deal with the application and there will be a fee to be paid for this professional service. Further, when the person who lacks capacity dies, a charge is levied to wind up the finances along with an annual charge until the final Deputy’s account is approved. All these costs will be taken out of the Donor’s estate and will remove financial control from the Donor’s family.

The benefits of making an LPA are substantial in terms of convenience and cost.

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