With so many people now living much longer it is becoming crucial to make sure that you and your loved ones have a Lasting Power of Attorney (LPA) in place. It should be part of everybody’s Estate Planning consideration.
Dementia alone shows there are more than 850,000 people in the UK that have it. One in 14 people over the age of 65 have dementia, and the condition affects 1 in 6 people over 80. Added to that the risk of a Stroke, Parkinson’s disease and other neurodegenerative disorders and you can see that the chances of losing mental capacity at some point are quite high.
Without an LPA in place life can be very difficult for those left to try and pick up the pieces. Our website page on LPAs shows a timeline where incapacity strikes and no Lasting Power of Attorney is in place.
A Lasting Power of Attorney is a legal document which allows a person (called the Donor) to appoint someone they know and trust to make decisions on their behalf should they become unwilling or unable to do so. This person or people who act on behalf of the Donor is called an attorney. Attorneys must always act in the best interest of the donor.
There are 2 types of LPA:-
- Lasting power of attorney for Health and Welfare
- Lasting power of attorney for Property and Financial Affairs
Let’s look at what each LPA can do and what decisions it covers:
Health and Welfare
Day to day decisions such as exercise, dietary requirements
Life sustaining treatment
Relocation into a care home or sheltered accommodation
A Health and Welfare LPA can only be used once it has been registered with the Office of Public Guardian (OPG) and when the donor loses mental capacity.
Property and Financial Affairs
Managing bank accounts
Collecting income and benefits
Making decisions with regards to the home
Selling the home
A Property and Financial Affairs LPA can be used as soon as it is registered with the OPG. The donor can restrict the rights the attorneys have under the “instructions” section of the LPA form.
Normally 1-4 attorneys can be appointed but it is important for the donor to ensure the attorneys are someone they know and trust to act in their best interests. Attorneys can act either:-
Jointly (attorneys must agree unanimously on every decision);
Jointly and severally (attorneys can make decisions on their own or together); or
Jointly for some and jointly and severally for other decisions (attorneys must agree unanimously on some decisions but can make others on their own).
Before an LPA is made, it is imperative that the donor is over 18 and has mental capacity. This means they must understand:
What an LPA is
Who they want to make it
Who they are appointing as attorney
How they have decided the attorneys; and
That they understand what powers the attorney will have.
If the donor cannot decide for himself in relation to the matter due to an impairment of or disturbance in the functioning of his mind or brain, such as late set dementia, it is likely they will not have the required capacity.
Essentially, the donor should be assessed on whether they have the ability to make a particular decision at a particular time. If unsure, a GP or independent mental capacity advocate can assess the donor’s capacity.
Once the forms have been submitted to the OPG, they usually take 12 weeks to be registered. However, since the pandemic we have seen times rise by up to 20 weeks. This is why it is so important to make sure that the LPA is taken out well before it is needed.
Can I do an LPA if my father has lost capacity?
No. An LPA can only be made by someone who has mental capacity. If a person loses mental capacity and has no LPA in place, an application would need to be made to the Court of Protection who will appoint a deputy to act in the donor’s best interests (this is known as Deputyship Order). Anyone over the age of 18 can apply to the Court of Protection to be your Deputy to make financial decisions on the donor’s behalf. This can be a lengthy (normally 6 month timeframe) and very expensive process with the added risk that the application may be refused by the OPG or that no provision will be made for Health and Welfare.
Do I have to register my LPA straight away?
To be effective, an LPA must be registered with the Office of the Public Guardian. There is a registration fee of £82 per document and is means tested so if the donor is on a low income or benefits, they may be eligible for remission or exemption of those fees.
It is better to have the LPA registered as soon as possible. The principle reason for this is that if the LPA is registered later on or where the donor starts to lose capacity, if the form is returned by the OPG for any reason (given the long turnaround time), the donor may no longer have capacity and therefore cannot sign the form. This will mean the LPA cannot be put in place for the donor anymore and an application for deputyship will need to be made. On top of that, imagine a loved one needs to go into a care home as their health has deteriorated but you are unable to access their funds to pay for care home fees until the OPG approve. Is the added stress worth it?
Once my LPA has been registered, I can’t change it.
Wrong. An LPA that has been registered can be revoked at any time, providing the donor still has mental capacity. The donor can also remove one or more attorneys. What they cannot do is add further attorneys. If other amendments were required a new LPA will need to be made and the old one revoked.
Can I get an LPA for my business?
Yes. Whilst there is no such thing as a “business LPA,” you can use the Property and Financial LPA to ensure attorneys can continue to make decisions about the continuity of your business, paying staff, entering into contracts etc. This means if you are a business owner you could have two Property & Financial Affairs LPAs, one dealing with your personal finances and the other appointing attorneys to deal with your business interests.
Capacity can be lost at any time and could be due to either an accident, a deteriorating condition so please don’t wait until it’s too late.
If you would like to find out more information regarding making a Lasting Power of Attorney, please contact Farsight Wills, Swindon and we would be more than happy to discuss your options.