Are Your Affairs in Order? Setting Up A Lasting Power Of Attorney (LPA)

Executing A Lasting Power Of Attorney

What is a LPA?

A LPA is a legal document that is put in place by you to appoint the people you choose to act as your attorneys. Your attorneys will have the legal authority to deal with your affairs and make decisions for you. This will be very useful should you lose mental capacity in the future and be unable to deal with these affairs and make those decisions yourself.

What are the different types of LPA?

There are two types of LPA. These are separate documents so you will need to decide whether you want to put in place either one or both. The two types of LPA are:

  • Property & Financial Affairs LPA: Your attorneys will make decisions about and deal with your legal and financial affairs.
  • Health & Welfare LPA: Your attorneys will make decisions on your behalf in relation to your health and welfare including whether or not to receive medical treatment.

Generally speaking, your attorneys will have complete authority to make all decisions about your financial and/or health and welfare matters as you would normally make for yourself. Therefore it is important to think carefully about who you want to appoint as your attorneys as you will be giving them a great deal of responsibility. You should only appoint people who you have a very high level of trust in.

Your attorneys must always act in your best interests and will be able to make decisions about and deal with the following:

Property & Financial Affairs

  •  Accessing all of your financial information;
  • Operating your bank accounts (depositing funds, withdrawing funds, moving funds around);
  • Buying and selling property on your behalf;
  • Insuring your property;
  • Dealing with your pensions;
  • Making investments on your behalf;
  • Paying your bills and care fees;
  • Sorting out your tax affairs; and
  • Applying for welfare benefits (e.g. Attendance Allowance).

Health & Welfare

  • Accessing information about your health and your medical records;
  • Arranging for you to receive medical, dental or optical treatment;
  • Where you should live (including moving into a care home);
  • Making decisions about your day-to-day care;
  • Liaising with social workers and care home staff on your behalf;
  • Making decisions about what medical treatment you are to receive;
  • Whether you are to receive life-sustaining treatment or not; and
  • Making appeals or complaints about your care or treatment.

The role of the Court

All LPAs must be registered with the Office of the Public Guardian (OPG) before they can be used by your attorneys. The OPG have strict requirements that must be satisfied before the LPA is registered and a particular signing procedure must also be followed.

As a result of this, mistakes in the preparation of LPAs can be easily made. Given that at present, it can often take four to five months for LPAs to be registered and that errors made may extend this timeframe, it is crucial to ensure that LPAs are drafted accurately. Any errors made could also cause difficulties when your attorneys try to use the LPA and may also mean that your wishes are not reflected.

Putting a LPA in place – things to consider:

1. Your personal details and your attorney’s personal details – If either your or your attorneys’ personal details are entered into the LPA incorrectly (e.g. an incorrect date of birth or a former name is used), institutions such as banks may not permit your attorneys to make decisions for you in relation to that asset. Please note that if your address or your attorney’s address changes after the registration of the LPA, you will be required to notify the OPG of the change of address, but it will not prevent your LPA from being effective.

2. How your attorneys are to act together – If you appoint more than one attorney, you are able to choose how they make decisions together. When preparing an LPA, care must be taken in selecting one of the following three options:

  • Jointly – If this option is selected, your attorneys must make all decisions unanimously together. This option can cause difficulties if one of your attorneys dies or can no longer act. This is because your remaining attorneys will be unable to act for you and your LPA will be ineffective.
  • Jointly and severally – This is the option that is most commonly selected as it is often the most practical. If this option is selected, your attorneys will be able to make decisions either on their own or together. If one of your attorneys dies or can no longer act, your remaining attorneys will still be able to act and your LPA will remain effective.
  • Jointly for some decisions and severally for other decisions – this is a combination of the above two options but is often rarely selected as it is more complicated and is potentially subject to the same issues as a joint appointment.

3. Replacement attorneys – Replacement Attorneys can be appointed to act should one or more of your original attorneys not be able to act for you. If your LPA includes replacement attorneys, the default position is that when one of your original attorneys stops acting for you, all your replacement attorneys will step in to act. Also, if your replacement attorneys fully replace your original attorneys, they will act jointly together. This could be problematic if one of your replacement attorneys dies or cannot act for you as your LPA will be ineffective. If you would like your replacement attorneys to act jointly and severally, this must be expressly stated in the LPA.

4. Order of signature – There is a specific order in which your LPA must be signed by you and your attorneys. Therefore, in order for your LPA to be correctly executed, you must first sign your LPA as the donor. If you are making a Health and Welfare LPA, you must sign the page regarding life-sustaining treatment on the same day or before you sign as a donor. Your certificate provider must sign next, with your attorneys signing after them. Once this has been done, you must then sign the paperwork to register the LPA with the OPG.

5. Witnesses to signatures – Most signatures to a LPA are required to be witnessed. As the donor, you cannot witness your attorneys’ signatures and they cannot witness your signature. Your witnesses must be over the age of 18 and should be completely independent from the LPA.

6. Ensure you are paying the correct registration fee – The standard cost for registering an LPA is £82 per document. However, depending on your income and any benefits you receive, you may be entitled to a fee reduction or an exemption.

How we can help

Tom Newton is an Associate in our expert Wills & Probate team, specialising in Willsadministration of estates, grants of Probate, and Powers of Attorney.

Here at Nelsons, our team of experts will be able to assist you in preparing your LPAs to navigate the above issues and ensure that they are accurately drafted to reflect your wishes. Should you require any advice, please contact Tom or another member of the team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online form.

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