This guide will help you understand the steps involved in preparing a lasting power of attorney to deal with your property and affairs. It outlines the wide scope of information you will need to provide and the choices you will have to make.
A Lasting Power of Attorney is not the only form of attorney that can be granted and is unlikely to be suitable unless you have health problems, or someone needs to assist you long term with management of your finances. If having read this guide you are unsure whether another form of power of attorney might best suit your needs, please contact us for a fixed fee interview. We will be happy to advise you as to which format will be best for you.
Whilst it covers the main points, this guide is not a definite guide to the law and procedure. Further information and discussion may be necessary to provide for your particular circumstances and wishes.
What is a Property and Affairs LPA?
Lasting Power of Attorneys (LPAs) replaced Enduring Powers of Attorney (EPAs) from October 2007. EPAs made before October 2007 are still valid subject to registration with the court if the person granting the EPA has lost, or is losing mental capacity.
The Property and Affairs LPA enables you to appoint someone to act as your attorney and make a wide range of decisions for you – including buying and selling of your property, operating any bank accounts, dealing with your tax affairs and claiming benefits on your behalf.
Unlike any other Power of Attorney, the LPA can continue to be used once a person has lost the mental capacity necessary to safely manage their affairs. The LPA, unlike other powers of attorney, cannot however be used and is not valid until it is registered with the Court (see section below headed Registration and Formalities).
Choice of attorney
This is clearly a personal decision but the person you appoint should be completely trustworthy due to the range of powers you are granting them. The appointment of a single person as attorney obviously creates more risk of the power being abused, and can cause problems (including cancelling the document) if the person appointed dies or is otherwise unable to act. The attorney can be the same or different person (or persons) that you may wish to appoint to deal with your health and welfare matters.
You should consider whether the person to be appointed has the necessary skills required, which will obviously depend on the complexity of your finances.
How attorney is to act
Your attorney should always act in your "best interest" and cannot act contrary to your instructions whilst you still have the mental capacity to make rational decisions after weighing up the choices open to you.
One or two people
If you intend to appoint more than one person to act as your attorney, then you need to consider if you want them to act:
- “together” – which means they must all agree to everything and all sign all documents. This can be difficult if they live a distance apart or if one goes away on holiday;
- “together and independently” – which means that they can act independently with only one signing if need be; or
- “together in some issues and independently in others” – this can cause confusion if it is not clear on the form when they must act together, or if circumstances arise which are not provided for.
Also, if you choose (a) or (c) and one attorney declines to act, dies, divorces (if you appointed your spouse or civil partner) or is made bankrupt, the LPA becomes null and void unless provision for a replacement is made. The law in circumstances (a) and (c) allows the remaining attorney to act alone or allows them to appoint someone to act with them.
If you are appointing more than one person, even if they are to act separately, you need to consider whether there is a risk of a conflict of interest and how this is to be resolved.
A common solution could be to appoint your spouse or civil partner as sole attorney, with your adult children or one of them as replacement in the event of your spouse/partner being unable to act. Alternatively you may wish to appoint an accountant or solicitor to act.
Replacement attorney
These are possible and are recommended. You will need to advise us of who they are to replace if for instance you wish to ensure a member from both sides of your family are always appointed. You also need to decide how they are to act with the existing attorneys or if they are to have the same powers. Usually people select for any replacement to have the same powers as the persons they replace.
Extent of authority
You can give your attorney power to do everything you can presently do in relation to your financial affairs, or you could choose to limit their powers (i.e. not permit the sale of certain shares, the house or items without agreement of a named third party that it is in your interest to do so). In order to prepare the lasting power of attorney we will need to discuss with you the careful drafting of any restrictions or conditions to be imposed, and their likely effect in various scenarios which could occur in the future.
You can also set out in the document guidance as to how you wish the attorney to manage your property and affairs or exercise any discretion you give to him. Such guidance may set out your ethical or religious beliefs for instance. Such guidance is however by law subject to the overriding duty of the attorney to act in your “best interest” if that conflicts with the guidance you set out.
The general rule is that anyone appointed your attorney cannot delegate that authority or power (except for pure administrative tasks or necessity). If you feel that it could be in your best interests for the attorney to delegate certain powers this can be set out in the document.
To properly advise you we will need details of your investment and wealth in general including the extent to which you jointly own property or bank accounts.
Charging
Individuals or family members acting as attorney are not permitted to recover the cost (including loss of earnings) of the time they spend fulfilling their role, unless you specifically set this out in the document. You therefore need to consider whether the attorney can recover the time they spend carrying out their functions from your finances. If a solicitor or other professional is to be instructed you should discuss with them how they will charge. In the lasting power of attorney you have to confirm the arrangements including any requirements for the attorney to produce accounts, or have their charges reviewed by a third person. We will need to discuss these arrangements with you in detail to draft the appropriate section of the form. Such provisions can minimise the risk of abuse by ensuring that at least the attorney has to provide an account of their actions, failing which any misuse might otherwise go undetected for years.
Gifts
You will need to decide the extent to which the attorney can give your money to himself or anyone else by way of gifts. Unless limited by you in the document, the attorney has authority to make gifts to people related to you (including himself if he is a relative) or to the types of charities or organisations you would normally have given to. Gifts to individuals must be related to their birthday or marriage or time of year (i.e. Christmas/Easter) and must not be unreasonable in terms of both the amount itself and in connection with the size of your estate.
We will need to know your specific views and wishes to draw up the document.
Disclosure of Will
It is generally useful for your attorney to be able to ascertain the terms of any Will you have made before giving or disposing of any personal items. Otherwise the attorney may give away, or sell, to A, believing this to be in your best interest, an item you have left to B in your Will. We will therefore need your instructions as to whether the attorney is to be entitled to obtain a copy of your Will, or only in certain circumstances.
Registration and Formalities
A compulsory part of the procedure for making an LPA is the requirement that a certificate is provided by a third party who verifies that you have capacity to make the document, understand its terms and that no undue influence is being brought to bear on you.
Without the certificate the LPA is unusable. In order to advise you of the appropriate certificate provider we will need to know of any disputes or conflicts in the family and your general health. We may also need to obtain a medical opinion or involve additional professional assistance, at your cost, if your capacity is failing or if you have problems with communicating generally.
The certificate can be provided by someone who has known you throughout the last two years but is not related to you, employed or in business with you or is not the proposed attorney or involved in any care home in which you reside. Alternatively, a medical or social worker, lawyer or independent medical advocate can provide the certificate. They may charge you for this.
The rules prohibit us from providing the certificate if a member of Anthony Gold is also to be appointed as attorney.
We will discuss the suitability of your proposed choice of certificate provider with you in the course of making the document and any risks of their not having the required knowledge, skills or being around to give evidence if the LPA is later challenged. We will also need to advise you on any further items that can be taken to minimise these risks.
The LPA can only be used once it is registered with the Court of Protection. The Court of Protection charge a fee of £125 for this. As part of the registration procedure, which is not included in our basic charges, notice has to be served on behalf of the attorney on up to 5 people (other than the attorney) you nominate at the time the document is prepared. We will therefore need their names and addresses. These people would be the next nearest members of your family, friends or carers who take an interest in checking that your needs are being met. The reason for having such persons is to ensure that when the application to register is being made, if not being done immediately, those interested in your wellbeing are aware of the application and can raise any concerns.
We recommend that you register the Power with the Court as soon as it has been made for the following reasons:
- If an objection or query is raised by anybody on whom notice is served or the Court, you will be able to provide your explanation as to the decision. If registration is postponed until capacity is failing, or your health deteriorates, you may not be able to express your views.
- The fact that you will be better able to make it clear to the objector your reasons for the decisions may be sufficient to enable the objection to be withdrawn.
- That both the witnesses to your signature and the certificate provider are more likely to be easily traced, still be alive, and be more able to recall the circumstances, thereby saving costs and making it easier to prove capacity.
Health and Welfare Power of Attorney
You can make a separate power of attorney granting someone the authority to make decisions as to where you should live or consent to non-emergency medical treatment if you are unconscious or lose mental capacity or are otherwise unable to communicate.
What to do now
If you have yet to set up an appointment and wish to do so please contact a member of theCourt of Protection team, call 020 7940 4000 or email cop@anthonygold.co.uk
