Lasting Powers of Attorney Solicitors

An LPA is a document which allows you to appoint one or more individuals to make decisions on your behalf in relation to your property & affairs and/ or your personal welfare.  By making an LPA you are making provision for your affairs to be continually managed in the event that you no longer wish to continue taking an active part in such decisions or you are no longer able to do by reason of mental incapacity.

All LPA’s must be registered with the Office of the Public Guardian in London prior to use following a set procedure.

There are currently 46 million people worldwide living with dementia, which is expected to rise to over 131 million by 2050.  Approximately 145,000 adults have severe learning difficulties and 1.2 million have a mild to moderate disability. A further 1% of the population will suffer from schizophrenia at one stage in their lives, 1% will be subject to manic depression and 5% will have serious or clinical depression. In addition, a significant number of people will suffer from a serious brain injury.

Viewed in the context of such statistics, it is important that everybody caters for a time in their lives when they might not be able to manage their affairs as they do now. This can apply as much to the young as to the old.  In the event that you can no longer manage your affairs and you do lose mental capacity, your assets will be frozen until such time as an individual or individuals are appointed with sufficient authority to deal with such assets. This will involve an application to the Court of Protection in the absence of an LPA.

LPAs were introduced with effect from the 1st October 2007 following the enactment of the Mental Capacity Act 2005.  They replaced Enduring Powers of Attorney in order to remedy some of the defects within the old Enduring Powers of Attorney system, as it was felt that they were too easily abused. The new LPAs are designed to be more robust and have greater safeguards then their predecessor.

The Mental Capacity Act 2005 (“the Act”) was introduced as a way of ensuring that vulnerable adults and those without capacity were given as much assistance as possible in making as many decisions as they could on their own.  Under the previous system, you were either deemed to have capacity or not to have it.  This meant that you could either take all of your decisions or you could take none.

The Act recognises that a person’s ability to make decisions can fluctuate depending upon the time of day or the subject matter of the decision.  The Act now recognises that just because an individual may not be able to evaluate the difference between two investments bonds as to where their money is invested it does not necessarily mean that the same individual cannot make the decision to withdraw £20 from their bank account to go with which to go shopping.

The Act confirms five principles that must be adhered to when an attorney (or another authorised individual) is making a decision on behalf of someone who may lack capacity.  These principles are:

1. Presumption of Capacity – all adults have the right to make his or her own decisions and must be assumed to have capacity to do so unless it is proved otherwise.
2. The right for individuals to be supported to make their own decisions – people must be given all appropriate help before anyone concludes that they cannot make their decision.  This may mean ensuring that they are in comfortable surroundings, recognising that they may be better able to make decisions in the mornings than in the afternoons etc
3. Individuals retain the right to make what may seem eccentric or unwise decisions
4. All decisions must be done in the best interests of the individual
5. Least restrictive intervention – anything done for or on behalf of people without capacity should be the least restrictive action in relation to their basic rights and freedoms.

The two types are health and care decisions, and financial decisions, and you can choose to create either or both of these LPAs.

Health and care decisions

This covers all decisions in relation to your health and social care.  It can only be used when a person has lost capacity and cannot give instructions in regard to these areas.  It includes the following areas:

• Where an individual might live
• Day to day care
• Consent to medical treatment
• Arrangements for medical treatment to be provided
• Arrangements for assessments – in relation to nursing services for example
• The refusal of or consent to life sustaining treatment

Financial decisions

This covers all decisions in relation to the management of finances.  Individuals can also authorise attorneys to make decisions on their behalf even if they still have capacity if it is more convenient to do so.  It includes the following areas:

• Arrangements for investments
• Withdrawals of cash
• Payment of bills
• Sales of property

Your attorneys cannot deal with the following:

• Consent to marriage or a civil partnership
• Consent to sexual intercourse
• Consent to a divorce following a two year separation 
• Consent to the dissolution of a civil partnership
• Placement for a child up for adoption
• Discharge parental responsibilities
• Voting in Elections

You should only choose people who you feel you can trust 100%.  They can be friends or family. You may choose to appoint a professional such as an accountant or a solicitor, although they will expressly reserve the right to charge for the work that they complete on your behalf.

However, it is not an easy job and the person that you wish to appoint must not only be trustworthy but organised and meticulous in their own finances.  The trust extends not only to honesty and integrity, but also there must be trust in the attorney’s good judgement.  There is a lot to take into account when a decision is made under an LPA and your attorneys must be familiar with the LPA itself, the principles of the Act as set out above and it is advisable that they are at least aware of the Mental Capacity Code of Practice which explains in greater detail the rights of incapacitated individuals and what attorneys must do in order to protect them.  Any deviation from the Code must be explained to the Court if required to do so. This is more strictly applied to professional attorneys but can be applied to lay attorneys at the Court’s discretion.

There are various options:

Solely – This is where you only chose to appoint one individual.  They have sole responsibility for making decisions on your behalf and are accountable to no other attorney.  This may be problematic if your attorney dies or becomes incapacitated as you have only chosen to appoint one.  However, this can be remedied by appointing a replacement attorney(s).

Jointly – in this case you appoint two or more attorneys jointly.  This means that they must make all decisions jointly and sign all cheques and other documentation.  This is good for accountability as no one attorney can act without the knowledge of the others.  However, it can be impractical if an attorney is out of the country on holiday for example as nothing can be done in their absence.  Further, in the event of one of the attorneys dying or becoming incapacitated, the entire document fails and you must either make another document or you must rely on the appointment of your replacement attorney(s).

Jointly and independently – you can appoint two or more attorneys jointly or independently.  This means that they can either act all together as outlined above or they can act independently of each other.  This means that if one is on holiday, the remaining attorney(s) may still take decisions.  This is less accountable than a joint appointment but more pragmatic.  If one attorney dies or becomes incapacitated, the remaining attorney(s) can continue to act without recourse to the appointment of any replacement attorneys.

Mixture of Jointly and Jointly and Independently – this means that you can choose to have some decisions made jointly and some other perhaps less important ones on a joint and independent basis. For example; you may decide that selling a property is a joint decision but paying the nursing home fees is a joint and independent decision.  If you opt for this, you must set out very clearly what decisions are joint and what are joint and independent.  In the event of ambiguity, the Court will have to resolve.  

It is advisable that you draft an LPA that will be suitable for all eventualities. Consequently, the appointment of at least one replacement attorney is advisable.

As part of the registration process, you may specify certain individuals who are to be notified of the intention to register your LPA.  You can choose any friends or family that your wish.

This is an additional layer of protection as these individuals may wish to object to the registration on your behalf, for example, if they think that the attorneys will not act in your best interests they may alert these concerns to the Court.  The Court can then investigate and will only proceed with the registration once it is satisfied that the objection raised is unfounded.

In order to try to remedy some of the previous abuses that took place under the old Enduring Powers of Attorney system, it is now necessary to have each LPA endorsed with a Certificate confirming that you were not placed under any pressure to create the document, that you understand its nature and significance and appreciate what you are allowing your attorneys to decide on your behalf.

This can be completed by someone who has either known you for more than two years or by a professional such as a solicitor. The certificate provider must be sure that you understand and are happy to create the LPA because if an objection alleging that you did not have sufficient capacity to make the document is ever raised, they may have to give evidence to the Court that you did have the necessary capacity.  It is therefore an important role and should not be undertaken lightly.

There are various categories of individuals who are prohibited from being certificate providers and these include anyone related to the attorney or employed by them and the manager of a Care Home.

All LPAs must be registered before they are used. There is a set procedure and a court fee to pay which is currently £82 per LPA being registered.

By immediate registration, the LPA is ready to be used at a moment’s notice, as may be required in the event of a sudden loss of capacity by virtue of an accident or a stroke for example.  There is no need to wait 8-10 weeks to have the document registered which may not be advisable in a sudden loss of capacity.  There is also no scope for maintaining the donor (discharging bills from their funds for example) during the period of registration as under the law relating to Enduring Powers of Attorney.  You may therefore have to make an urgent application to the Court for an interim order to obtain immediate access to money if required which may have an adverse effect on administration and cost.

You may never need to use the document and therefore the professional costs and court fee incurred in completing the registration can be saved.  You may also change your mind as to who you wish to act, and an unregistered LPA is far easier to change than a registered LPA which will involve the centrally maintained register at the Office of the Public Guardian being altered.  You may only want the document to be used in the event of mental incapacity. Consequently, if it is only registered at that point, it might be easier for the asset holders to determine who has the correct authority to complete the transaction.

However, this does not fit well with the ‘floating capacity’ test which confirms that for every decision, you must be assumed to have capacity and encouraged to make the decision and only when it is clear that you cannot, can your attorneys make the decision for you provided that it is in your best interests. In this scenario, it is likely that the asset holders will still require contemporaneous medical evidence of incapacity such as a letter from the GP that may have to be updated on a sporadic basis so that the banks are satisfied that they are dealing with an authorised attorney.

Yes, you may revoke it at any time that you have capacity to do so.  If the LPA is unregistered, you must let your attorneys know what you have done.

If the LPA is registered, you will need to complete a form to alert the Office of the Public Guardian so that they can amend the central register accordingly.

There are several circumstances:

• An LPA in relation to Property & Affairs is automatically revoked if an attorney becomes bankrupt
• An Attorney can disclaim which confirms that he does not wish to act.  If the LPA is unregistered, he must alert you, the donor, as to his decision.  If the LPA is registered, the Office of the Public Guardian must be notified
• If an attorney dies and there is no-one to replace them
• If you have appointed your spouse/ civil partner and subsequently divorce or dissolve the civil partnership, the appointment is revoked.  As outlined above, this would be fatal in the case of a sole or joint appointment so it would be prudent to appoint more than just a spouse / civil partner and to ensure that any appointment is either on a joint and independent basis or there is an appointed replacement attorney

The need for registration before use confirms who is entitled to act and the Office of the Public Guardian will maintain a central register to confirm the existence and details of registered LPA’s.  This register will be searchable so that confirmation as to who is authorised to act on behalf of a particular individual can be obtained.

Two new criminal offences under the Act have been introduced of (a) ill treatment and (b) wilful neglect of a person who lacks capacity.  A person found guilty of such an offence may be liable for imprisonment for up to five years.

It must be resolved as quickly as possible as no decision can be taken in the event of a dispute.  You should only seek to appoint people who will work well in a team to ensure that such disputes do not arise.

In the event that they do have a dispute, the attorneys may have to make the following applications:

• Declaration – apply to Court for a declaration as to whether (a) a person lacks the necessary capacity to make this decision or (b) whether an act that is intended is lawful.  This step would be taken where there is a serious depute between professionals over an individual’s capacity to make a particular decision or where there is a more wide ranging dispute
• Single Orders- you can apply to the Court for a particular decision to be made, for example, whether a partnership agreement should be dissolved of which the individual is a member.  However, any such application will have incurred an application fee

• Our costs range from £410 + VAT for one or £520 + VAT for a couple based on your instructions.  This is to ensure that you receive all the information that you will require in order to create a fully workable LPA
• Costs incurred in the registration of the LPA are £380 + VAT both an individual or joint LPA, once again based on your instructions
• The Court Fee for the registration of the LPA is £82. This is subject to available exemptions and remissions in certain cases

There are no ongoing administrative costs once the LPA has been created and registered.

Our costs take in to account the time we will take to explain to you the implications on the document and go through all the information that you need to know before completing the Power of Attorney.  It is a serious personal matter and not just a process.   We will provide you with a high level of bespoke advice, both on what the setting up and creation of an LPA involves but also the duties and obligations that your attorneys are under in order to assist you in making decisions in the future.

It is a complicated area but one that it would be prudent to consider whilst you are mentally fit to do so to ensure that you will always have someone who can assist you in making decisions as required in the future.