A Lasting Power of Attorney or LPA covers decisions about your financial affairs and your health and wellbeing. It was created in 2007 under the Mental Capacity Act 2005 and came into effect on 1 October 2007. This article gives you some general guidance on Lasting Power Attorney.
The LPA replaced the former Enduring Power of Attorney (EPA) in October 2007, although your EPA may still be valid.
Personal and business affairs
The LPA is designed primarily to deal with someone’s personal affairs and finances and their health and welfare. If you have any sort of business affairs you might want to consider a subject matter expert to deal with more complicated affairs.
The LPA for Finance and Property comes into effect if you no longer want to make decisions for yourself or if you lose mental capacity. The LPA for Health and Welfare only comes into effect once you have lost capacity. Both LPAs must be registered, however, before you lose mental capacity. If the donor has already lost mental capacity, an LPA cannot be registered. In that event, you would need to apply to the Court of Protection to be a deputy.
Best interests
The guidance for the attorney under a Lasting Power of Attorney is that they must always make decisions that are in the donor’s best interests and what they think the donor would want them to do. This is part of the five key principles of the Mental Capacity Act. The attorney cannot disagree with a decision just because they don’t agree with it or it seems illogical, unless it would cause harm to the donor. The attorney must also be careful not to make decisions in their or others interests, it must be in the donor’s best interests.
There are two types of LPA:
- Finance and Property
- Health and Wellbeing
LPA for Finance and Property
An LPA for Finance and Property can be used by the attorney while you still have mental capacity if you choose that and this is the preferred option. The donor can also state that they do not want the LPA to be used until they have lost mental capacity. The donor would need to have a specific mental capacity test to assess whether they have lost capacity or not.
An LPA for financial decisions can cover things such as:
- managing the donor’s bank accounts
- paying bills
- looking after assets
- buying and selling property
- dealing with any mortgages
- managing stocks and shares although see the article on Discretionary investments
- paying for outgoings
- doing and submitting a tax return
When the the LPA is being registered the donor can state how they want decisions to be made or they can leave it up to the attorney to make the decisions.
Keeping accounts
Your attorney must keep account of everything that they do on the donor’s behalf and make sure that the donor’s money is kept separate from theirs. The donor can ask to see the accounts and how much money they have. The attorney should have these readily accessible for inspection.
LPA for Health and Wellbeing
The LPA for Health and Wellbeing can only be used once you have lost capacity. The attorney will make decisions about:
- whether the donor can stay in their own home or
- whether the donor needs to move to sheltered accommodation or
- putting the donor in a care home
- the donor’s medical care
- what the donor should or should not eat, for example.
Note: The donor can state Preferences and Instructions in the LPA to tell the attorney what their wishes are, for example, that they wish to stay in their own home for as long as possible.
The attorney can also make decisions about who can see the donor. So, they can restrict access to certain individuals if it is in the donor’s best interests.
Your attorney to also make decisions about life-saving treatment if the donor gives special permission.
Appointing attorneys
How do you choose? Giving a person power of attorney is an onerous position so, chose wisely. If you appoint more than one attorney you will need to decide how the attorneys are going to act. There are two options:
- Jointly; or
- Joint and severally
Jointly
When attorneys have to act ‘jointly’ it means that they MUST make any and all decisions together. All decisions means even the simplest decisions such as paying a bill have to be agreed.
If you have appointed joint attorneys and one of them can not act and you have not appointed a replacement, then neither will be able to act. So, make sure that you have appointed a replacement attorney.
Joint and severally
These decisions can be made either individually or together. One attorney does not need the consent of the other and this is on all decisions unless the donor has specified otherwise. This is generally the more flexible choice but, it can cause problems if one of the attorneys disagrees with the other’s decision.
The donor can specify that some more important decisions have to be made jointly, for example, selling a property.
If one of the attorneys cannot act under a joint and several LPA then, the other one can act alone.
Replacement attorney
You can specify a replacement attorney for the eventuality where one cannot act. This is particularly important where the donor has chosen joint attorneys.
For more guidance see our articles on Lasting Power of Attorney
