Lasting Powers of Attorney – Explained
It is never easy to think about what could happen to us and our families should we ever lose our faculties. Yet it is important to consider how much worse the situation would be if you were to suffer a stroke, serious accident or dementia without dealing with it first.
What is Lasting Power of Attorney?
A Lasting Power of Attorney (LPA) is a legal document which allows someone you trust to make decisions on your behalf if you can no longer do so.
“LPAs are recognised by financial institutions, hospitals, care homes, legal sectors and local authorities as well as tax, benefits and pension authorities”.
It is a common misconception that LPAs are only needed by elderly people and while it is correct that more people of advancing years do take out an LPA, an LPA is equally essential for a young person as it is for an elderly one.
This is because anyone could lose mental or physical capacity at any age.
Solicitors often refer to LPAs as a basic insurance for adults. You pay for an LPA once and the document then acts as a safeguard throughout your life (unless you decide to cancel it of course). It gives you and your family reassurance that, should the tragedy strike and you be unable to make your own decisions, there is someone legally authorised by you to act on your behalf with minimum disruption and trouble.
An LPA doesn’t mean a loss of control of your affairs, it simply offers peace of mind to you and your nearest and dearest. You choose whether it can be used either before, or only when, you lose mental capacity.
Types of Lasting Power of Attorney
There are two different forms of Lasting Power of Attorney that can be made. One deals with your property and financial affairs and the other deals with your health and personal welfare issues. You can make one form of Lasting Power of Attorney without making the other. The Office of the Public Guardian will maintain a record of all registered Lasting Powers of Attorney.
When to Make a Lasting Power of Attorney?
You need to have sufficient mental capacity to understand the implications of the LPA at the time it is made. If you lack sufficient mental capacity as result of an accident or an illness, you will not be able to create your own LPA and ultimately the Court will need to make one on your behalf.
You can only set up a Lasting Power of Attorney when you have mental capacity. Once you’ve lost capacity, it’s too late.
Without a Lasting Power of Attorney your spouse or partner will not be able to access your assets or manage your financial affairs and/or welfare needs. Your Joint accounts could also be frozen. Your family would then have to apply to the Court of Protection to become a Deputy. This process can be lengthy, costly and very stressful for those concerned; it is therefore prudent (and considerably cheaper) to make and register an LPA sooner rather than later.
Matters to Consider When Making an LPA
The decisions you make will have significant legal implications as to how your affairs are managed after you become incapable. Your representative should only ever make a choice for you if you’re unable to make that specific decision at the time it needs to be made. For example, if you fall into a coma, your representative would start looking after your affairs. Yet if you wake from the coma, you should be able to make your own decisions again.
You will be required to consider the following points:
- Whom to choose to be your attorney.
- The number of attorneys to appoint.
- How the attorneys are to act.
- Whether replacement attorneys will need to be appointed.
- Whether there are any special instructions you wish to include for your attorneys.
- The indication to others of any preferences or wishes you have in the event that you lose mental capacity.
- If you want your attorneys to be paid.
- Whether you want anyone to be notified about registration of the LPA.
- You will need a Certificate Provider. A Certificate Provider is a person who confirms so far as he/she is aware that you understand the nature and scope of the LPA and was not induced to make it by fraud or undue pressure. Your Certificate Provider must be an independent and impartial third-party. Solicitors are often requested to act as a Certificate Providers due to their impartiality and knowledge of the law concerning LPAs.
- The completed LPA forms will include your full details and those of your attorneys and must be signed by you, your attorneys and your Certificate Provider. Your LPA will not be valid unless it is in the prescribed form and properly executed.
How Much Does a Power of Attorney Cost?
There’s a compulsory cost of £82 to register a Power of Attorney (in England and Wales). If you earn less than £12,000 per year, you can provide evidence to have a reduced fee of £41. In addition, those on certain benefits could be exempt from fees.
In summary it costs £82 each for the property and finance LPA and the health and welfare LPA, so if you get both, the amount payable to the Office of the Public Guardian will be £164.
Above and beyond that, if you decide to use a solicitor, you’ll also have to pay legal fees, though it’s possible to set up a Power of Attorney on your own.
Do You Need a Solicitor to Assist You with Creating LPAs?
The answer is NO. In fact, the Government has made the process of making and registering the LPAs easier than it used to be. Having said that an LPA is a powerful document and so it is extremely important that you understand its legal implications and consider it properly. Subsequently, you may wish to instruct a solicitor to make sure that your LPA will work for you. It is more than advisable to instruct a solicitor should you feel unsure about anything, the family does not get on or there are complex assets, such as businesses or overseas property.
Get in touch today to discuss your lasting power of attorney options.