Why it’s never too early to have a Lasting Power of Attorney
This is where having a Lasting Power of Attorney (LPA) can help your loved ones avoid large costs and having to make difficult decisions.
In simple terms, an LPA allows any adult – known as the ‘donor’ – to give an individual – the ‘attorney’ – the power to deal with the donor’s property and financial affairs, or health and welfare needs, if the donor is unable to make these decisions.
An LPA may sound like something you only need to think about when you reach the later stages of life, but it’s not just the elderly who experience life changing illnesses.
Anybody over the age of 18 can register an LPA provided they are of sound mind at the time the documents are prepared.
Experts say it’s never too early to have an LPA as an illness or accident can strike at any time.
There are two types of LPAs: a Property and Financial Affairs LPA, which enables your attorney to manage your property and affairs including: paying bills, signing cheques, collecting income and benefits, buying and selling shares, and even buying and selling houses.
A Personal Welfare LPA allows the attorney to make decisions about your healthcare and medical treatment such as giving consent to particular types of healthcare, whether or not you stay at home or go into residential care, and authority to give or refuse life sustaining treatment.
Here, we answer the most common questions about LPAs:
What would happen if I didn’t have an LPA?
If you were to lose capacity without having an LPA, someone would have to apply to the Court of Protection for a deputyship order. This is an expensive and time consuming process and can limit the power of the attorney. It could also mean you do not receive the type of care you might want.
Who should I pick as my attorney?
Great care should be taken when choosing your attorney. Remember, this person will potentially be making life changing decisions on your behalf.
Catriona Lumiste, a care fees specialist at the financial adviser, Informed Choice, says it is important your attorney will have your best interests at heart: “The attorney may have to manage your money and investment matters as well as make decisions on how your money is spent to look after you and provide for your needs. Therefore it is paramount you choose someone who knows you well and that you trust to make these decisions on your behalf.”
You may want to choose more than one attorney to deal with different aspects of your life.
Susanne Grimwade, a partner at QualitySolicitors FJG, says: “The donor can appoint and stipulate any specific guidance or restrictions as to how the attorney(s) manages your affairs. For instance, if you own a business you may wish to appoint one attorney to deal with your business affairs and another to deal with your personal finances. You may have specific wishes with regards to your long term care or the type of treatment you wish to receive if you were seriously ill. An LPA can be tailored to an individual’s needs.”
Who can be an attorney?
Anyone can be an attorney, as long as they are 18 or over and are capable of making decisions.
According to Citizens Advice, in some cases, someone who is bankrupt can’t be an attorney. If an attorney becomes bankrupt, power of attorney may be taken away.
Solicitors and trust corporations such as banks can act as an attorney.
Professional attorneys can charge for their services. If your attorney is a friend or relative, they can get back out-of-pocket expenses, but they can only get paid for carrying out their duties if the donor has agreed to this on the LPA form.
How do I set up an LPA?
You can establish and register an LPA through a solicitor or you can do it yourself by obtaining a form from the Office of the Public Guardian. It can also be downloaded from the internet at www.justice.gov.uk./forms/opg/lasting-power-of-attorney. A fee of £130 is charged for registration of each LPA application and it can take up to three months to be registered.
Paul Levy, a solicitor at OGR Stock Denton LLP, says the form is quite complex and if you make a mistake it will be rejected and your £130 will be wasted.
“The requirements for giving notice and obtaining a certificate from a provider who confirms you have mental capacity is now also very complex. A solicitor can help with this. You should enquire about cost. My firm charges £600 plus VAT. This is not cheap, I know, but if you don’t do it and someone needs to apply to the Court of Protection, that can cost thousands,” Levy says.
What’s the difference between an LPA and an ordinary Power of Attorney?
An ordinary Power of Attorney will become invalid if the donor loses the mental capacity to make decisions within its scope. An LPA continues to be valid and effective even after a donor has become mentally incapable of handling his or her own affairs.