Lasting Power of Attorney
Do I Need A Lasting Power Of Attorney (LPA)?
It could be argued that a Lasting Power of Attorney is even more important than a Will, simply because you need it during your lifetime. An LPA is the bridge between your wishes and your family and trusted friends.
A Lasting Power of Attorney gives someone you trust the legal authority to make decisions and manage your affairs on your behalf, if either you’re unable to in the future, or you no longer wish to make decisions for yourself. There are two types: (a) property and financial affairs and (b) health and welfare. Anyone over 18 years old with mental capacity can make a Lasting Power of Attorney, appointing one or more attorneys.
There may come a time in your life when you are unable to manage your financial affairs or personal welfare, owing to some form of incapacity. To protect you and ensure the right decisions are made, you will need someone you trust to act on your behalf.
If you were to become incapacitated due to injury or illness, who do you TRUST to make important care and financial decisions on your behalf? Without a Lasting Power of Attorney, the decision is out of your hands.
What will happen if I do not have a Lasting Power of Attorney?
An application has to be made to the Court of Protection for a Deputyship Order. There are three main problems:-
1. Lengthy delays
The process takes 9-12 months during which time your accounts (including joint accounts) are frozen, bills cannot be paid and insurance cannot be renewed.
2. Substantial costs
£2,500 – £3,000. Your accounts are frozen, so someone else will need to pay on your behalf. There are also ongoing Deputy charges and Court fees.
3. Losing control
A Judge will make the final decision as to who is appointed to deal with your affairs. Often, it is not the person you would have chosen.
This person is called a Deputy and can often be a retired solicitor, court official, or sometimes, the Local Authority. Your family would have the added stress of dealing with Court appointed officials every time a decision is required. They would also have no official say in any medical treatment for you even if they knew what your wishes would have been.
The Court of Protection’s job is to safeguard the interests of people who are vulnerable and no longer have the capacity to make decisions for themselves. If you want your loved ones to care for you and make decisions on your behalf, then you need to ensure you have both Lasting Powers of Attorney in place.
Don’t leave this critical decision to others, who may or may not have your best interests at heart – protect yourself, your family and your hard-earned assets with a Lasting Power of Attorney today. We know of customers who needed an LPA but couldn’t have one because they left it too late. The process of then going to the Court of Protection to take over the affairs of their loved one then became expensive, involved months of waiting and was soul destroying for the families involved.
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When should I create a Power of Attorney?
The best time is always right now, whilst you are fit and well. In order to create a Power of Attorney you will still need to have the capacity to make your own decisions. It is essential that you make the Power of Attorney while you are capable of making decisions about who to appoint as your attorneys and what powers you want to give to them. Many people now create a Power of Attorney well before they need it as it is impossible to create a Power of Attorney once you have lost capacity. You might think it is better to wait until later in life, or until a diagnosis of a medical condition, but your circumstances can change very quickly out of the blue. Having a Power of Attorney in place will protect both you and your loved ones.
I already have a Will, can my executor handle my affairs?
A Will is totally different from a Power of Attorney. A Will states how your estate is distributed when you die. An executor does not have the right to manage your affairs during the course of your lifetime. If you want someone to handle your affairs whilst you’re still alive, you will need to appoint an attorney. If you’re an attorney, you can’t make a Will on behalf of your loved one.
Can I still handle my own affairs if I appoint an attorney?
Yes of course. You should be encouraged and supported by your attorney to continue dealing with your affairs (or as much of them as you can manage) for as long as is possible. Powers of Attorney are typically created by people who are happy to continue handling their own affairs until they reach a point in the future when they are no longer capable of doing so. At this time, the Power of Attorney gives your chosen attorney the power to assist you in managing your affairs if you are unable, to manage your affairs on your behalf.
What happens after I complete my Lasting power of Attorney?
In England and Wales, it isn’t possible to start using a Lasting Power of Attorney until it has been registered with the Office of the Public Guardian (OPG). In England and Wales, it takes between 4 and 6 weeks to register an LPA, assuming there are no mistakes in the application. If there are any errors, the registration will have to be submitted again. That is why it is best to use Portcullis to do this for you.
Are Power of Attorney documents legally binding documents?
Absolutely! A Power of Attorney is legally binding if it has been created correctly by the individual whilst they have the mental capacity to do so. Critically they must fully understand what they are doing at the time of making and registering the document.
Can I ‘undo’ my Lasting Power of Attorney in the Future?
In England and Wales, an individual can end their Lasting Power of Attorney, even if it has been registered, at any time as long as they still have mental capacity. To do so, they will need to create a ‘deed of revocation’ and send it to the Court (OPG) so that they can cancel registration of the Lasting Power of Attorney.
How will the bank know that I am now his/her attorney?
You will need to inform banks and other financial services providers that you have the Power of Attorney to act, and you will be asked to provide the relevant document as evidence. In England and Wales, this is the Court approved Power of Attorney document.
I live in England or Wales and have an Enduring Power of Attorney (EPA), is this still valid?
In England and Wales, the old EPA documents were replaced by Lasting Powers of Attorney on 1 October 2007, but EPA’s that were signed and witnessed before this date can still be used. EPA’s must be registered with the Office of the Public Guardian at the onset of the donor losing mental capacity. EPAs only cover property and finances.
Do I need both types of Lasting Power of Attorney?
In England and Wales, different types of Power of Attorney give your attorneys the right to look after your financial affairs and your health and welfare. To ensure you have attorneys looking out for you in both areas, it is important to have both types.
Must all my Attorneys agree to a particular decision being made?
Only if the attorneys have been appointed jointly, rather than jointly and severally.
What is the difference between appointing attorneys jointly and jointly and severally? Which is the best option?
Jointly means the attorneys must all agree to any decisions and every document must be signed by all attorneys. Jointly and severally means that any of the attorneys can make a decision and sign documents together or without the others. The big advantage of the latter is convenience and speed of action, but you must have total confidence in your attorneys to grant each the power to act alone.
How is mental capacity determined?
All adults are legally assumed to have mental capacity until it is proved otherwise. If there are disputes, the Mental Capacity Act 2005 sets out clear principles.
What gifts can the attorney make on behalf of the donor?
The attorney can buy gifts or give gifts of money on behalf of the donor, including donations to charities. The attorney must only make gifts to people who normally receive gifts from the person, on suitable occasions such as birthdays and weddings or to charities that normally receive donations from the person. All gifts must be relative and reasonable in relation to the size of the estate.
What happens if one of the attorneys dies before the donor?
If the attorney dies before the Power of Attorney is being used, the donor will usually be able to create another Power of Attorney appointing a replacement attorney. If the death occurs after donor has lost mental capacity, and they only have one attorney, the Power of Attorney will become invalid. It is for this reason that a Replacement Attorney should be appointed.
What is a Replacement Attorney and should I appoint one?
A replacement attorney steps in if the original attorney is no longer able to act on the donor’s behalf – in the event of their death, for example, or following a divorce. Appointing one can be a sensible precaution, but your replacement attorney should be as trusted a person as your original attorney.
Is an attorney entitled to make a large gift from the donor’s assets?
No, though it may be possible to make an application to the courts to do so.
Can the donor’s money be mixed with the attorney’s money or held in a joint account in the names of the donor and attorney?
The donor’s accounts must be kept separate to the attorney’s. But in some cases, they may have joint accounts – where a husband is acting for a wife or vice versa, for example. Providers of these accounts should be notified.
How do I amend my Power of Attorney after it is signed and witnessed?
The exact procedure varies according to the type of Power of Attorney and where you live.