Lasting Power of Attorney (LPA).
We’re starting to hear more and more about Lasting Power of Attorney. More of us are living for longer, but not always healthier lives in our advanced years. It is important to address who will manage our affairs, and make decisions if we are not able to. This is an issue not just for the elderly. The ability to make our own decisions can be eroded slowly eg via dementia, or by a trauma event at any stage of life.
What if I am no longer able to manage my affairs?
By having a Power of Attorney, you appoint people you know and trust to make decisions for you if the worse were to happen. Your financial affairs and personal welfare are in the hands of people you know to make decisions you would approve of.
Who do I choose as a Lasting Power of Attorney?
You can appoint a friend, relative or a professional as your Attorney. Choose people you trust to act in your best interests, consider how they manage their own affairs. Appointing more than one Attorney is sensible so the position of power and influence is not abused.
A Lasting Power of Attorney must contain a certificate completed by an independent person. This certificate confirms that the Donor understands the power and importance on the LPA. Also that it is not creating the power under duress. This person must have known the Donor for at least 2 years. Anyone the donor specifies can be noted on the registration of the Lasting Power of Attorney (up to 5 people). However if there is no one to notify then the Donor must have a Certificate Provider.
The different types of Lasting Power of Attorneys
Enduring Power of Attorney (EPA)
EPAs were replaced in October 2007 with Lasting Power of Attorney (LPAs). EPAs set up before 1st October 2007 remain valid. However if the Donor is becoming, or is mentally incapable of managing their affairs, the Attorney(s) must register the EPA with the Court of Protection. It cannot be assumed that the Donor has lost mental capacity, and Attorneys must follow the principles of The Mental Capacity Act 2005.
If you have an EPA, have mental capacity to make decisions for yourself (i.e. the EPA is unregistered), you can make a Personal Welfare LPA to run in conjunction with the EPA (see below).
What has replaced Enduring Powers of Attorney
EPAs have been replaced with three different documents:
- A Lasting Power of Attorney (LPA) for Property and Financial Affairs
- A Lasting Power of Attorney (LPA) for Health and Welfare
- A General Power of Attorney.
Note. These Powers are only applicable to England and Wales.
Lasting Power of Attorney (LPA) for Property and Affairs
A Lasting Power of Attorney for Property and Financial Affairs authorises the Attorney(s) to make decisions about the Donor’s property and affairs. These powers include:
- buying property in the Donor’s name
- selling any property belonging to the Donor (including the Donor’s home)
- managing investments
- running business affairs
- general decisions about the Donor’s healthcare and how that might be paid for.
The scope of authority your appointed Attorney(s) have can be written in to the LPA. However decisions may still need to be made for you. This may involve the Court of Protection if the restrictions are too limiting.
Lasting Power of Attorney (LPA) for Health and Welfare
A Lasting Power of Attorney for Health and Welfare covers decisions about a Donor’s personal welfare and includes:
- where they live
- how they are cared for
- the healthcare they receive.
This LPA covers the decision to place a Donor in a nursing home or not. However, the payment of subsequent nursing home fees could not be made on just this LPA, but in conjunction with Property and Financial Affairs LPA.
Attorneys of the Health and Welfare LPA can only use this power if the LPA has been registered and the Donor cannot make the decision themselves.
An Advance Directive or Living Will can be overridden by a subsequent Health and Welfare LPA if it expressly extends to life saving treatment. This also means that a Health and Welfare LPA can be overridden by a valid and applicable Advance Directive (Living Will) made after the LPA. If the LPA does not contain decisions regarding treatment. The Health and Welfare LPA form joins both the welfare and medical decisions or exclude one power over the other.
Invoking an LPA
It should be noted that Lasting Power of Attorney has no legal standing until registered with the Public Guardian’s Office. LPAs can be registered at any time i.e. before the Donor loses mental capacity, or when the Attorney believes this to have happened. Once registered, the LPA must be used in accordance with the stated conditions. This may include restriction preventing its use until the Donor lacks mental capacity in this matter. After registration, the Donor can continue to make decisions providing they still have the mental capacity to do so.
Revoking or cancelling the power
The Donor can revoke or cancel the Lasting Power of Attorney at any time providing they still have mental capacity.
In the event a spouse of civil partner is the Attorney, or Donor, dissolution or annulment of the relationship will automatically revoke the power.
An LPA for Property and Affairs is revoked if the Attorney(s) or the Donor are declared bankrupt however, an LPA for Health and Welfare is not terminated by bankruptcy.
General Power of Attorney (GPA)
A GPA is ideally suited for situations where you need to give certain rights to another person(s) to deal with your property for a limited time. Going away on holiday or moving out of the country for a few years are good examples.
A GPA can’t be used in cases where you need someone to act on your behalf because you are incapable of doing tasks yourself. (See LPA above). A GPA does not need to be registered and is therefore fully effective as soon as the donor creating it has signed it.
A General Power of Attorney can be revoked at any time by either writing up cancelled across the document of simply tearing it up.