What is a LPA?

Lasting Powers of Attorney (LPAs) were introduced in 2007 to replace Enduring Powers of Attorney. There are two different types of LPA: one dealing with property and financial affairs, and the other with health and welfare issues.

Property and Financial Affairs

This LPA gives your attorneys authority to make decisions about your property and financial affairs when you are unable to do so for yourself. This can include dealing with your bank accounts, making decisions about your investments, property and how you spend your money. This type of LPA is essential for business owners, so that the business can continue to function if capacity is lost. Your attorneys can use this type of LPA only after it has been registered with the Office of the Public Guardian (OPG). Once it has been registered, your attorneys can make decisions on your behalf whether or not you lack mental capacity. This can be particularly useful if you are away for an extended period of time or have a physical disability.

Health and Welfare

This LPA gives your attorneys authority to make decisions about your health and welfare when you cannot do so for yourself. This can include decisions about where you live, who you see, the type of care you receive and extends to decisions about life-sustaining treatment. Your attorneys can only use this LPA after it has been registered with the OPG and only when you lack the capacity to make the decision in question.

General information about LPAs

They were introduced by the Mental Capacity Act 2005 and there are certain principles which your attorneys must follow when making decisions for you. Each decision is to be considered independently. You may have capacity to make some decisions but not others. As a starting point, your attorneys must assume that you can make your own decisions unless they can establish that you can’t and they must support you in your decision-making process as far as possible.

You can appoint one or more attorneys. If you appoint more than one attorney, you must specify whether the attorneys are to act jointly (i.e. all attorneys must act together) or jointly and severally (i.e. your attorneys can act individually). The joint and several appointment is more flexible. A joint appointment will fail if any one of your attorneys is unable to act for any reason, including death or incapacity.

We therefore recommend that you opt for a joint and several appointment. It is possible to name replacement attorneys but in the case of a joint appointment, the replacement can only step in, when none of your attorneys are able to act. With a joint and several appointment, the replacement can act if one attorney is unable to act.

It is possible to place restrictions on your attorneys but we would not recommend that you do so, unless there is an issue that you feel particularly strongly about. If you trust someone enough to be your attorney, then a restriction should not be necessary and may prevent them from taking action, to your detriment. However one common restriction is used where a person is a business owner. It is possible to have one LPA appointing family to look after your personal affairs and another with business-minded people to make your business decisions for you.

As mentioned above, before an LPA can be used it must be registered with the OPG. As that process takes around two to three months, we recommend that you register your LPAs as soon as they have been completed, so that they can be used as soon as they are needed. When applying to register your LPAs, notice must be given to at least one person who is not an attorney.

Where registration takes place straightaway, this becomes a formality and the nominated person will simply receive notice that you have prepared a Lasting Power of Attorney and are registering it with the Office of the Public Guardian. They will be advised that there is no need to take any further action, unless they want to object to what you are doing. It is possible to give notice to more than one person but in most cases one is sufficient.

The LPA document comes in three parts. Part A deals with your attorney appointment, Part B is to be completed by a certificate provider and Part C by the attorneys. A certificate provider is someone who goes through your LPA with you, witnesses your signature (in most cases) and then completes a certificate to confirm that they have done so and that in their opinion you understand what you are doing and are not being coerced into signing your LPA. Where we prepare an LPA, we are happy to act as certificate providers for no additional charge. A certificate provider should be a professional with relevant experience or someone you have known for at least two years.

The registration process is a form-filling exercise, which culminates in the giving of notice and the application to the OPG. For each LPA there is a registration fee of £82. However, if you are on means-tested benefits, then the fee is waived and if your annual gross income is less than £12,000, then the fee is reduced by 50%. In both cases, it is necessary to provide evidence of your means tested benefits/annual income.

We recommend that LPAs are put in place at an early stage on a similar basis as insurance. You may never need to use them but, if you do, they will be invaluable. Without an LPA, if mental capacity is lost, then in order to deal with financial affairs/health and welfare issues, it will be necessary for someone to apply to the Court of Protection for a Receivership Order. This is a long-winded and expensive exercise and your Receiver will need to obtain authority from the Court of Protection for any significant action thereafter and may be required to produce annual accounts.

It used to be the case that Health and Welfare LPAs were mainly used by people who had no close family members. However, where there is no LPA and a person lacks the capacity to make a decision about a health and welfare issue, in law, Social Services have authority to make that decision above your relatives. In recent times, we have found that this has become more of an issue and in some cases Social Services have been dogmatic about the type of care a person receives, overriding the wishes of his/her family.

If having read this note, you would like further information or advice about LPAs or would like to have LPAs prepared for you, please contact Vicky Bligh on 01752 388910 or e-mail
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The Private Client Team

Fiona Chesworth
Vicky Bligh