Lasting Powers of Attorney

Introduction
The Mental Capacity Act 2005 (‘the Act') introduced the Lasting Power of Attorney, a legal document which allows someone you trust to make decisions about such things as your health care or finances at a time when you lack the mental capacity to make those decisions yourself.

There are two very different forms of Lasting Power of Attorneys (LPAs) that can be made. One deals with your financial affairs – LPA (Property and Affairs) which replaces the existing Enduring Power of Attorney. Any Enduring Power of Attorney executed prior to 1 st October 2007 will still be valid.

The other form of Lasting Power of Attorney deals with your personal welfare issues – LPA (Personal Welfare). This is a new legal concept although similar to a Living Will or Advance Directive.

You can make one form of Lasting Power of Attorney without making the other.

Lasting Powers of Attorney (Property and Affairs) – LPA (PA)

The Basics
An LPA (PA) allows you to authorise another person (your Attorney) to make decisions on your behalf in relation to your property and financial affairs and to manage your financial affairs. You are known as the Donor. Your Attorney can do anything in relation to your property and financial affairs that you could do yourself, eg. buy and sell property; manage your investments; open and close bank accounts; claim benefits and pensions and carry on your business.

Your Attorney can only use the LPA(PA) once it has been registered with the Office of the Public Guardian (OPG). Once your LPA (PA) has been registered, your Attorney can act both before you lose mental capacity to manage your own affairs and after you have lost capacity.

You may choose more than one Attorney. If you choose more than one, you must decide if your Attorneys must always act together or whether they can also act independently of one another. You may appoint your Attorneys to act independently in basic financial transactions but require that they act together when, for example, selling your home.

Your Attorney will have limited ability to make gifts with your money. Any gifts made must be consistent with gifts that you usually make to family and friends on occasions such as birthdays and Christmas.

Your attorney has no power to make a Will for you.

Restrictions and Conditions
You can apply conditions and restrictions to the use of the LPA(PA) by your Attorney. For example, you may specify that the LPA(PA) is only to be used when you lack capacity or you may exclude your Attorney's ability to make gifts on your behalf. If you include a restriction that your Attorney can only act when you lack capacity, financial institutions may require medical evidence of lack of capacity before accepting your Attorney's authority to act.

You can also guide your Attorney as to how you would want them to use the LPA (PA). Such guidance can be in the LPA (PA) itself or in a letter of guidance but the latter will not be binding on your Attorney.

Safeguards
The LPA(PA) contains three important provisions to protect your position. Firstly, an independent person (known as the Certificate Provider) must read through the LPA(PA) with you in the absence of the Attorney . The Certificate Provider must then certify that you are making the LPA(PA) of your own free will and that you understand its purpose and the powers you are giving the Attorney.

Secondly, you can name up to five people who must be notified when an application to register the LPA(PA) is made. This gives the people you have named the right to object to the registration of the LPA.

Thirdly, the LPA(PA) must be registered with the OPG before it can be used.

Registration
Either you or your Attorney can apply to register the LPA(PA). Notice must be given to the people you have indicated in the LPA(PA). The current fee payable to OPG on registration is £150. The LPA(PA) can be used immediately following registration (unless you have applied a restriction that it can only be used when you lack mental capacity). This may be useful in the event of physical infirmity or if you are intending to be out of the country for a period of time.

The OPG will maintain a record of all registered LPAs.

Lasting Powers of Attorney (Personal Welfare) – LPA (PW)

The Basics
An LPA(PW) enables the Donor to appoint an Attorney to make decisions about social care issues and medical treatment, including life-sustaining treatment.

You do not have to appoint the same person to be your Attorney under an LPA(PW) as under your LPA(PA).

Many of the elements of the LPA(PW) are similar to the LPA(PA). You must have a Certificate Provider who reads through the LPA(PW) with you in the absence of the Attorney and who certifies that you understand the nature of the LPA(PW) and its effect and that you are not acting under duress. You must name the people who you wish to be given notice when an application to register is made. You may appoint more than one person as Attorney and, again, you can indicate whether they can act alone or whether they must act together. You may decide that there are some decisions that one Attorney can make alone but there are other matters where you would wish them to act jointly; for example, consenting to surgery.

Whilst an LPA(PW) must also be registered before it is used, a crucial difference between an LPA(PA) and an LPA(PW) is that an LPA(PW) can only be used when the Donor lacks mental capacity to make their own decisions about personal welfare. The Act requires that an individual is given every reasonable opportunity to make a decision themselves before they are considered to lack capacity.

Once the Donor's lacks capacity, an LPA(PW) gives an Attorney authority to make decisions in relation to a variety of issues, including:

• where the Donor should live and who they should live with;
• who the Donor should have contact with;
• arrangements needed for the Donor to receive medical or dental treatment;
• the Donor's day-to-day care; and
• consenting to or refusing medical treatment and examination.

Restrictions and Conditions
Again, you may include restrictions and conditions in the LPA(PW) as to how your Attorney is to use their authority. You may, for example, require that a named person be consulted before decisions are made about residential care or medical treatment. You may know of a potential family dispute which would stop your Attorney allowing certain family members having contact with you, so you include a restriction that your Attorney is not to have authority to decide who can have contact with you.

Your Attorney will have no power to consent to or refuse life-sustaining treatment unless the LPA(PW) gives them express authority.

If you have already made an Advance Directive to refuse treatment, it may become invalid if you later make an LPA(PW) in which you give your Attorney authority to make such decisions.

You may wish to prepare a letter of guidance for your Attorney so that they are aware of your views when making decisions on your behalf. Whilst such a letter is not legally binding, your Attorney must take your views and beliefs into account when considering how to act in your best interests.

General Points
Your Attorney has a legal duty to act in accordance with the principles of the Act and to have regard to the Code of Practice accompanying the Act. An Attorney must be over 18 years of age. An individual who is bankrupt cannot be appointed as an Attorney for an LPA (PA).

A Donor can revoke an LPA at any time whilst they retain capacity. Revocation must be in the prescribed form.

An Attorney under an LPA(PA) has no authority to make decisions about the Donor's personal care and an Attorney under an LPA(PW) has no authority to make decisions about the Donor's property and affairs. Although you can, of course, appoint the same person under separate LPAs to carry out both roles.

You can appoint a replacement Attorney in the LPA who will act if the initial Attorney is unable to act or their appointment is revoked. Your chosen replacement Attorney must sign the LPA to indicate their willingness to take up the role.

An LPA is a deed – you cannot make any changes to a signed, witnessed and certified LPA.

These notes have been prepared to provide a brief outline only. Guidance booklets are available from the OPG for anyone wishing to make an LPA; for Attorneys and for Certificate Providers. These booklets should be read by all concerned before completing an LPA.

Call us on 0870 164 2372 to speak with a Tax Lawyer or an Estate Planning Solicitor at Pannone LLP.