A Lasting Power of Attorney (LPA) is a legal document which basically says who should look after your finances and your welfare should you become incapable of doing so.
We take a closer look at an LPA, including how to set one up and who can act as your attorney.
What is a Lasting Power of Attorney (LPA)?
A Lasting Power of Attorney or LPA is a legal document.
It enables someone you trust, to make decisions on your behalf.
These decisions can be about your property and financial affairs or your health welfare.
The person starts to make the decisions at a point in the future wheneither:
- you no longer wish to make those decisions yourself or
- you lack the mental capacity to make those decisions yourself.
An LPA must be registered with the Office of the Public Guardian (OPG) to be valid.
What types of Lasting Power of Attorney are there?
There are 2 types of Lasting Power of Attorney:
1. Property and financial affairs LPA
This allows you to authorise someone else to make decisions for you regarding your property and financial affairs.
You can appoint someone to manage these affairs for you whilst you still have capacity or when you lack capacity.
The person may for example deal with your personal finance matters, receive your pension and decide on priorities to pay off your bills and debts.
With this LPA the person cannot make decisions about your personal welfare.
2. Health and Welfare LPA
This allows you to authorise one or more people to make decisions for you regarding your personal healthcare and welfare.
These decisions though can only be taken when you lack the capacity to do so yourself, for example if you have dementia, have a stroke or are unconscious.
You decide to what level you want your Attorney to act.
For example deciding on medical treatment, whether you continue to live in your own home and decisions around ‘life-sustaining treatment’.
This LPA also covers decisions about day to day aspects of your personal welfare, your diet and your daily routine for example.
With this LPA the person cannot make decisions about your property and financial affairs.
Why Do You Need An LPA?
Without a valid LPA, the Court of Protection makes declarations, decisions or orders on financial or welfare matters affecting people who lack capacity to make such decisions.
Basically therefore if you become mentally incapacitated and do not have an LPA in place, the Court of Protection will take charge over your affairs.
Be aware that an LPA is a personal document. This means that you cannot make it jointly with another person.
So, for example, if you are married, you cannot make an LPA with your spouse or civil partner.
Each of you needs to make your own LPA.
Who Can Act As Your Attorney?
You can appoint one or more people to be your Attorney.
They must be over 18 and clearly must be people you trust. They must have mental capacity (ie can make decisions themselves) and must not be bankrupt.
If you appoint more than one person, you can decide whether they must take decisions together or can act together and independently.
Being appointed an Attorney is an important role and one that the person chosen has to agree to take on.
What are an Attorney’s responsibilities?
Firstly, an attorney cannot act until the LPA is registered with the Office of the Public Guardian.
With a financial and property LPA, an attorney can act whilst the donor still has mental capacity, as long as the LPA is registered.
With a Welfare LPA an attorney can only act if the donor lacks mental capacity and as long as the LPA is registered.
An attorney must act within the scope of the authority given in the LPA and in accordance with the principles set out in the Mental Capacity Act 2005.
An attorney must have regard to the guidance in the Code of Practice to the Mental Capacity Act and can only make decisions that are in the donor’s best interests.
How Can You Make A Lasting Power of Attorney?
Lasting power of attorney forms can be downloaded.
For example, you can download an LPA form from the OPG website.
You can fill the form in yourself and then get it signed by an independent third party, a professional or someone you have known for at least 2 years.
There is a registration fee per type of LPA, currently this is £110.
Whilst you can do all this yourself, an LPA is an important legal document and you may feel more comfortable using a professional solicitor.
This will cost more but you may feel it to be the better option, your choice.
How much does a Lasting Power of Attorney cost?
The cost of making a LPA varies according to a number of factors.
If you decide to print off the forms and register the LPA yourself:
The current fee is £110 per type of LPA
i.e. £110 for a property and financial affairs lasting power attorney and £110 for a health and welfare LPA.
There are concessions available, for example if you are in receipt of Income Support, Housing Benefit, Jobseeker’s Allowance or work-related Disability Benefit payments.
It is best to speak directly to the Office of the Public Guardian to find out whether you are eligible for a reduction or exemption from the power of attorney cost.
If you decide to use a solicitor to prepare the paperwork for you, each solicitor will set their own fees. Looking around it seems that currently this may cost from £300 upwards for a single person and single LPA, with VAT added if appropriate.
In this case you are buying the professional expertise of the solicitor who will:
- Set up the appropriate type of Lasting Power of Attorney, financial or welfare or or both
- Provide you with guidance to you and your attorneys on signing the documents
- Complete the registration forms
- Advise on costs and any opportunity for fee reduction
- Make the registration with the Office of the Public Guardian
What is an Ordinary Power of Attorney
You may have heard of an ordinary power of attorney.
This is a legal way of giving someone else the power to manage your financial affairs when it is difficult for you to manage them yourself.
This may be for example because of a physical disability or perhaps because you are in hospital.
You, as the ‘donor’ effectively ‘donate’ this power to somone you trust, such as a close friend or family member.
It only applies if you are fully aware of the implications of the arrangement.
You can cancel this arrangement at any time.
It will automatically stop should you become mentally incapable of managing your own financial affairs.
What is an Enduring Power of Attorney?
A quick final note on an enduring power of attorney (EPA) as it was previously possible to make one of these to manage someone’s property or financial affairs.
Once registered, an EPA could be used before someone lost their mental capacity or after they lost it.
However, since 1 October 2007, it’s not been possible to make a new EPA.
That said, if an EPA was made before 1 October 2007, it can still be registered.
If already registered, an EPA will still be valid.
However, even if you have an EPA, it can only be used to look after someone’s property and financial affairs, not their personal welfare. You would need to consider a health and welfare lasting power of attorney for this aspect.
As well as information on the OPG website, the Alzheimer’s Society has information on LPAs.