What is a Lasting Power of Attorney?

A Lasting Power of Attorney (LPA) is a document which legally enables one or more individuals you know and trust, your attorneys, to have the Power to make decisions on your behalf if you lose Mental Capacity (‘capacity’). Unlike a Will which deals with your estate when you are no longer here, an LPA deals with your Financial and Care decisions while you are alive but lack capacity.

An LPA is made when the donor has mental capacity; in preparation for if they lose their capacity.

There are two different types of LPAs, the property and financial affairs LPA and the health and welfare LPA.

Property and Financial Affairs LPA

This covers decisions about the donor’s financial affairs and their property. A Property and Affairs LPA can be used by attorneys whilst the donor still has capacity if they wish, which can be very useful if the donor has or develops any mobility issues/Physical incapacity. An attorney for a Property and Affairs LPA will be able to:

• Buy or sell property.
• Operate the donor’s bank account and invest any savings.
• Claim welfare benefits or pensions and receive income for the donor.
• Deal with the donor’s tax affairs.
• Pay the donor’s mortgage, rent and household expenses.
• Insure, maintain or repair the donor’s property.

Health and Welfare LPA

This covers decisions about the donor’s personal welfare and health. Unlike the Property and Affairs LPA, a Health and Welfare LPA can only come into effect once the donor has lost capacity. An attorney for a Health and Welfare LPA will be able to:

• Make decisions on where the donor is living and on their day to day care.
• Arrange any medical, dental or optical care for the donor.
• Allow access to any of the donor’s personal information.
• Consent or refuse any medical treatment.
• Decide on the donor’s diet and clothing.

It may also include a provision on whether the donor wishes to accept or refuse life sustaining treatment.

Why Make an LPA?

If a person loses mental capacity and there are no LPAs in place, their family and friends do not have an automatic authority to deal with their finances or health. In order to do so, they would need to apply to the Court of Protection to be a deputy for them. This is a long and expensive process and incurs regular fees (which LPAs do not). By making LPAs, the donor gets to choose who can make decisions on their behalf. They can have a sole attorney, multiple attorneys and can also name replacement attorneys. They also get to choose what restrictions they want to put on the attorneys (if any). By not making LPAs, this decision is left to the Court of Protection. They may impose large amounts of restrictions on family or appoint family members who a person would not have chosen themselves.

LPAs and losing capacity are often considered as something only the elderly need to consider. Whilst conditions such as Alzheimer’s or Dementia are more common amongst the elderly, this is not the only way that mental capacity could be lost. Some of the most common conditions which can occur irrespective of age are: stress, stroke, coma, brain injury, alcohol and drug misuse. Mental capacity could be lost due an accident, such as through a traffic accident or through contact sports. Some mental illnesses could also lead to a temporary or complete loss of mental capacity.

How Can Attorneys act?

Where a client is wishing to appoint multiple attorneys or replacement attorneys, it should be considered how these attorneys are to act. There are three different ways that multiple attorneys can act and each has their own advantages and disadvantages. Multiple attorneys can either act jointly, jointly and severally, or jointly in some matters and jointly and severally in others.

It is strongly recommended that multiple attorneys act jointly and severally due to its flexibility over the other appointments and the ability for attorneys to continue to act should one of them be unable to act.

A further possibility recommended by the OPG if the clients wish for the benefits of a joint appointment but wish for the flexibility to allow attorneys to continue acting could be to create two LPAs. In the first LPA, attorneys can be appointed jointly. In the second LPA, the same attorneys can be appointed but acting jointly and severally, avoiding the problem should one of them be unable to act. This second LPA would include a restriction stating it would only come into effect should the first LPA fail.

This may of course be financially impractical for many clients as drafting costs and registration costs would double. It may however be an option for high net clients who want attorneys to act jointly to provide a safeguard but are happy for a backup of them acting jointly and severally to avoid the LPAs failing.