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Afford yourself peace of mind – Lasting powers of attorney

Posted
June 4, 2013
Wills, Trusts and Probate

It’s widely accepted that it’s important to make a Will and the associated provision for when you die - the dangers of not doing so are fairly obvious. However, what if you lose the capacity to make decisions about your financial affairs and your welfare before you die? This was the reason that Lasting Powers of Attorney (LPA’s) were introduced by the Mental Capacity Act 2005, which came into force on the 1 October 2007. The LPA’s allows you to choose people that you trust to make decisions on your behalf at a time in the future when you either no longer wish to make those decisions or because you have lost the mental capacity to make those decisions. The Act introduced two types of LPA: • Property and Financial Affairs – this is for decisions about managing finances and dealing with property on behalf of the donor e.g. paying bills, managing investments or selling the donor’s house. • Health and Welfare – this is for decisions about the donor’s health and welfare e.g. what care or medical treatment the donor should have or where the donor should live. The donor can also authorise their Attorney to give or refuse life sustaining treatment.

This type of LPA can only be used once the donor has lost the mental capacity to make those decisions himself. Within the document the donor has the opportunity to appoint Attorneys, direct how those Attorneys are to make decisions, appoint replacement Attorneys and choose who (if anyone) should be notified upon registration of the LPA. There is also a certificate of capacity which must be completed by an independent party. The person giving the certificate must confirm that, in their opinion, the donor understands the purpose and scope of the LPA, the donor is not being forced into making it and that there is no reason why the donor should not make the LPA. Once the LPA has been signed by the donor, the certificate is given and the Attorneys sign, the LPA must be registered with the Office of the Public Guardian before it can be used (whether or not the donor has mental capacity). 

There is a court registration fee for this, currently £130. Code of Practice The legal framework provided by the Mental Capacity Act 2005 is supported by a Code of Practice which provides guidance and information to anyone who is working with or caring for adults who lack capacity. Attorneys appointed under an LPA are under a duty to have regard to the code. Enduring Powers of Attorney (EPA’s) EPA’s created before 1 way as an LPA. The main difference between an EPA and LPA is that an EPA does not need to be registered in order for the Attorney to be able to use it. However, the Attorney has a duty to register the EPA with the Office of the Public Guardian when he believes the donor is becoming or has become mentally incapable of managing their affairs. Revocation Both LPA’s and EPA’s can be revoked at any time as long as the donor has mental capacity. The donor signs a Deed of Revocation and the Attorneys are informed. If the Power has been lodged with institutions such as Banks, they should also be informed so that they know that the Attorney no longer has the authority to act on the donor’s behalf. For further information please contact:- Sue Tipper on 01293 596908 or sue.tipper@stevensdrake.com This article is provided for general information only. Please do not make any decision on the basis of this article alone without taking specific advice from us. stevensdrake will only be responsible for the advice we give which is specific to you.

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