What would happen if you had an accident, became seriously ill or simply were unable to deal with your affairs? It would make your everyday routines of paying bills, deciding on appropriate medical treatment and making financial decisions difficult and in some cases impossible. It is therefore important to consider appointing someone (an Attorney) who could look after your financial affairs and personal welfare if you became incapable.
The Lasting Power of Attorney (LPA) is the successor to the Enduring Power of Attorney (EPA), which was replaced on 1st October, although any EPAs signed before then are still valid. Two new types of Lasting Power of Attorney (LPAs) have been introduced: The Property and Affairs LPA and The Personal Welfare LPA.
A Property and Affairs LPA gives the person granting the power (the donor) the ability to authorise one or more attorneys to look after some or all of their property and financial affairs if they themselves become incapable of doing so. As such the attorney may be able, amongst other things, to buy or sell property on the donor’s behalf, operate their bank account, manage their investments, deal with their tax affairs and claim benefits.
Where a valid Property and Affairs LPA exists an attorney can, unless it is specifically stated otherwise, act for a donor who still has the mental capacity to deal with their own affairs, but who finds it difficult for some other reason, for example because of a physical incapacity. Equally the attorney can act on behalf of a donor who has lost mental capacity. The attorney does not always have to assume complete authority over a donor’s affairs. A donor can continue to manage their day-to-day affairs with the attorney looking after more complicated matters.
It is also possible to make a second type of LPA, a Personal Welfare LPA, which authorises the attorney to make decisions on matters such as where the donor should live, who they should have contact with, whether they should consent to or refuse medical treatment, and their general day-to-day care. This was not previously possible under the old system. A Personal Welfare LPA can however only be used where the donor has lost the mental capacity to make decisions on the matters in question for themselves.
There are various safeguards aimed at protecting anyone making an LPA, many of which have been introduced or extended since the EPA regime was in force.
At the time of the LPA being made, an independent person such as a registered healthcare professional, solicitor or social worker, or someone who has known the donor personally over the previous two years, must discuss the LPA with the donor and sign a certificate to confirm that, in their opinion, no fraud or undue pressure has been used to induce the donor to sign the LPA, and that the donor understands the scope and purpose of the document they are signing.
The attorney cannot use an LPA without first having had it registered with The Office of the Public Guardian. This requirement now exists in all cases and is not limited to instances where a donor has lost mental capacity, as it was under the EPA regime. Prior to registration an attorney must notify the donor, and up to five other people of the donor’s choice, of their intention to apply to have the LPA registered, providing an opportunity for any concerns or objections to be raised with The Office of the Public Guardian.
Attorneys are subject to a legal duty to always act in the donor’s best interests, and are required to abide by the provisions of a new Code of Practice.
Although the LPA regime is not as straightforward as the old one, LPAs are still potentially very useful documents. If you would like to make effective contingency plans for your future or would like further advice on LPAs please contact Alice Clewes on 0191 232 8345 or email: Alice.Clewes@hay-kilner.co.uk
This article is not legal advice; it is intended to provide information of general interest about current legal issues. Please contact us to discuss how the contents of the article may affect you.