With 12.5 million people in the UK over the age of 65 and just under 1 million Lasting Powers of Attorney registered with the Court of Protection, it’s hard to believe that despite the number of people being affected by dementia or some other illness which affects their capacity, measures aren’t being put in place to protect loved ones.
A Lasting Power of Attorney is a legal document which allows a person (called the donor) to appoint someone they know and trust to make decisions on their behalf should they become unable to do so in the future. This person is called an attorney. Attorneys must always act in the best interest of the donor.
There are 2 types of LPA: –
Let’s look at what each LPA can do and what decisions it covers:
Health and Welfare
A Health and Welfare LPA can only be used once it has been registered with the Office of Public Guardian (OPG) and when the donor loses mental capacity.
Property and Financial Affairs
A Property and Financial Affairs LPA can be used as soon as it is registered with the OPG. The donor can restrict the rights the attorneys have under the “instructions” section of the LPA form.
Normally 1-4 attorneys can be appointed but it is important for the donor to ensure the attorneys are someone they know and trust to act in their best interests. Attorneys can act either: –
Before an LPA is made, it is imperative that the donor is over 18 and has mental capacity. This means they must understand:
If the donor cannot decide for himself in relation to the matter due to an impairment of or disturbance in the functioning of his mind or brain, such as late set dementia, it is likely they will not have the required capacity.
Essentially, the donor should be assessed on whether they have the ability to make a particular decision at a particular time. If unsure, a GP or independent mental capacity advocate can assess the donor’s capacity.
Once the forms have been submitted to the OPG, they can take up to 16 weeks to be registered.
Can I do an LPA if my father has lost capacity?
No. An LPA can only be made by someone who has mental capacity. If a person loses mental capacity and has no LPA in place, an application would need to be made to the Court of Protection who will appoint a deputy to act in the donor’s best interests (this is known as Deputyship Order). Anyone over the age of 18 can apply to the Court of Protection to be your Deputy to make financial decisions on the donor’s behalf. This can be a lengthy (normally 6-month timeframe) and very expensive process with the added risk that the application may be refused by the OPG or that no provision will be made for Health and Welfare.
Do I have to register my LPA straight away?
To be effective, an LPA must be registered with the Office of the Public Guardian. There is a registration fee of £82 per document and is means tested so if the donor is on a low income or benefits, they may be eligible for remission of those fees.
It is better to have the LPA registered as soon as possible. The principle reason for this is that if the LPA is registered later on or where the donor starts to lose capacity, if the form is returned by the OPG for any reason (given the long turnaround time), the donor may no longer have capacity and therefore cannot sign the form. This will mean the LPA cannot be put in place for the donor anymore and an application for deputyship will need to be made. On top of that, imagine a loved one needs to go into a care home as their health has deteriorated but you are unable to access their funds to pay for care home fees until the OPG approve. Is the added stress worth it?
Once my LPA has been registered, I can’t change it.
Wrong. An LPA that has been registered can be revoked at any time, providing the donor still has mental capacity. This does mean a new LPA will need to be made and a further £82 registration fee paid.
Can I get an LPA for my business?
Yes. you can use the Property and Financial LPA to ensure attorneys can continue to make decisions about the continuity of your business, paying staff, entering into contracts etc. This means if you are a business owner you could have two Property & Financial Affairs LPAs, one dealing with your personal finances and the other appointing attorneys to deal with your business interests.
Capacity can be lost at any time and could be due to either an accident, a stroke or a deteriorating condition so please don’t wait until it’s too late.
“I don’t need an LPA because my next of kin can make important decisions on my behalf”
Not true. No-one can act on your behalf or make decisions on your behalf if they have not been legally authorised to do so.
“My Will has appointed executors, so they’ll be able to make decisions on my behalf.”
Not true. A Will is entirely separate to an LPA. Executors appointed in a Will only have the power or authority to distribute your estate as requested and in line with your Will, on death. They have no authority to make decisions on your behalf during your lifetime.
“I don’t need an LPA until I become elderly and of ill health”
Not true. An LPA can be made by anyone over the age or 18 who has full mental capacity. Someone may lose capacity or no longer be able to make decisions due to an accident, being in a coma or other mental illness.
The sooner you put an LPA in place the better, as you know provisions will have been put in place in the event the unthinkable happens. If you wait and, in that time, lose capacity, it will be too late to get an LPA and your loved ones will need to apply for a Deputyship Order from the Court of Protection. This will not only take a long time but also a costly process.
“Once my health and welfare LPA is registered, it means someone else can make decisions for me and I don’t want that while I have capacity”
Not true. A health and welfare LPA only comes into effect when the donor loses capacity even if the LPA has been registered.
“Getting an LPA is expensive”
The cost of registering an LPA is £82 per document. In comparison, if you fail to make an LPA and lose capacity, your family will be left with no other option but to apply for a Deputyship Order, this will cost significantly more.
“Me and my partner have joint bank accounts, so we don’t need LPA’s”
Not true. This is always the most alarming to couples when they are told that even if they have a joint bank account, this does not mean the partner will be able to automatically access funds to pay for bills, mortgage or general expenses. If the spouse was to lose capacity, the bank have the ability to remove access and freeze the account until they receive a copy of the registered LPA which is extremely stressful for the spouse.
From THE BRITISH BANKING ASSOCIATION
What happens if the other joint account holder becomes mentally incapable? In England and Wales, if one party to the joint account loses capacity to operate their account, banks and building societies will use their discretion to determine whether or not to temporarily restrict the operation of the account to essential transactions only (for example, living expenses and medical/ residential care bills for both parties) until a deputy has been appointed or a power of attorney registered. In Scotland, you can continue to run the account as long as the original account mandate was either-to-sign and there is not a court order preventing the account from being used.
If the other joint account holder appointed you as attorney, under a ‘lasting power of attorney’ (in England and Wales) or a ‘continuing power of attorney’ (in Scotland), you can register the power of attorney and run the joint account.