There are two types of Lasting Power of Attorney (LPA), a Financial Decisions LPA and a Health and Care Decisions LPA.
The Financial Decisions LPA permits your attorney(s) to deal with your property and financial affairs. This can include buying and selling property, dealing with investments and your tax affairs.
The Health and Care Decisions LPA permits your attorney(s) to make decisions in relation to your health and welfare. This includes decisions such as the type of health care and medical treatment you receive, where you live, and day-to-day matters such as your diet and daily routine.
If you lose mental capacity without having a Financial Decisions LPA in place, your assets would effectively be ‘frozen’. You can no longer make decisions, and nobody is authorised to do so on your behalf. If that were to happen, someone would have to apply to the Court of Protection to be appointed as your Deputy to be able to manage your affairs. This can take several months and is an expensive process.
If you lose mental capacity without having a Health and Care Decisions LPA in place, your next of kin would not be legally entitled to make healthcare decisions for you. Putting in place an LPA ensures that the people who know you best can make these personal decisions for you, should such a situation arise.
Your attorneys must be 18 or over and should be someone who you trust. In the case of your Financial Decisions LPA, you may wish to appoint someone with professional expertise, such as your financial advisor or your solicitor. People often choose to appoint their spouse and their children as their attorneys, particularly in the case of a Health and Care Decisions LPA, as this relates to personal decisions.
Your attorney must appreciate the importance of the role and be willing to accept such responsibility.
You may appoint more than one attorney and you can choose whether they must act jointly, so that they take all decisions together. If attorneys are appointed to act jointly, the death, bankruptcy or loss of capacity of any of them will cause the LPA to be revoked, unless a replacement attorney is named in the LPA.
Alternatively, you may want your attorneys to act together or individually as they choose, or to act jointly in relation to certain specified matters, such as the sale of the family home, but individually in relation to all other matters. It is also possible, and often recommended, to appoint replacement attorneys should your original attorney die or lose capacity to act as your attorney.
You must be at least 18 years old to create an LPA and it must be created on a standard form. We can prepare these forms for you and guide you through the various questions and issues that may arise when doing so. You can do this yourself, but it can be a complicated process, and our role is to ensure that the LPA is completed correctly and to make the process as stress free as possible.
An LPA must be signed by you as the donor, your attorneys and also by a person known as a ‘Certificate Provider’. This is someone independent who confirms that you understand what you are doing by granting the power of attorney, and that you are under no pressure to give it.
A Certificate Provider cannot be: -
If we, acting as your solicitors, are not appointed as attorneys, we can act as your Certificate Provider.
You do not have to register LPAs straight away; however, an LPA cannot be used until it has been registered with the Office of the Public Guardian (OPG). The registration fee is currently £82 per LPA.
Registration with the OPG can take 8-12 weeks, and so it is recommended that registration of the LPA should take place immediately after it is made. This avoids delay at a time when important decisions cannot be postponed, for example regarding care options. In addition, if there is an error in the LPA which would invalidate it, immediate registration means that the donor may be able to correct the error before losing capacity.
The rules governing the enforceability of Powers of Attorney in another country are governed by the Hague Convention on the Protection of Adults (2000). Whilst the UK is a signatory to the Hague Convention, it has only ratified the Convention in respect of Scotland. Therefore, the Convention does not yet have legal effect in England, Wales and Northern Ireland.
There is provision in the Mental Capacity Act 2005 of England and Wales for institutions (such as banks) to recognise foreign Powers of Attorney; but in reality, this is unlikely to happen and the attorney will need to seek a specific declaration from the Court of Protection, which can be an expensive and time consuming process.
Unfortunately, until the UK ratifies the Convention for all parts of the UK, the rules remain confused. In practice, to avoid complications, delay and potential expense, we would recommend that any clients that spend the majority of their time in the UK or hold substantial assets in the UK, have an LPA in place, and also ensure that they put in place an equivalent Power of Attorney in any other countries in which they spend their time or have significant assets.
Copyright © 2013 - Oury Clark.