A lasting power of attorney allows people to have protection later in life if they lose mental capacity and cannot make their own decisions about property, finance or their health and welfare needs. An LPA is a legal document produced by an individual - known as the donor - while they have mental capacity as defined by the Mental Capacity Act 2005 and in which they nominate attorneys to act on their behalf if they lose mental capacity in the future. Most attorneys are next of kin, loved ones or close family members, and they act on the donor’s behalf.
The different types of LPA
The two types of LPA are health and welfare, and property and financial affairs. Most people execute both of these and often nominate the same people to act, although the attorneys can be different.
Both types of LPA have to be registered with the Office of the Public Guardian at a fee of £82 per LPA. Previously, the lasting power of attorney service had been largely paper-based and cumbersome, with long delays. You often had to wait for as long as 20 weeks before an LPA was registered.
Now, there is a new online service for LPAs registered from 2020. This is wholly digitalised, making registration faster and allowing organisations and institutions secure access to the LPA using a unique access code for instant verification. This does away with the inconvenience and delay of waiting for a paper LPA.
When to use lasting power of attorney
The idea is that, hopefully, you will never have to use a lasting power of attorney but that it is always there as a safeguard.
Most people execute LPAs at the same time they write a will. This means that your nominated attorneys can act on your behalf in the years ahead should you become infirm and lose mental capacity. A nominated attorney is usually a spouse or life partner but can be a child as long as they are over 18. You must register an LPA with the Office of the Public Guardian for it to be valid.
How to use lasting power of attorney
You need to think about an LPA carefully when you create it. But once it is registered, you can more or less forget about it until you might need it unless you want to change your attorneys or cancel it. The legislation for LPAs only applies in England and Wales; there are different provisions in Northern Ireland and Scotland.
Choosing suitable attorneys is vital, and you can allocate how they make decisions which can be 'jointly and severally' or jointly. Attorneys who make joint decisions need to work well together. You might also include conditions in the LPA, such as a requirement that a financial adviser is consulted for monetary decisions over a specific value or that a doctor should always be involved in decisions about medical treatment, especially life-sustaining treatment.
To create a registered LPA, you can download all the LPA forms and documents on the government website, www.gov.uk. You must complete the documents correctly to avoid rejection and delay. Discuss the appointments with your attorneys and make sure they understand what is involved and are happy to do it before you complete the paperwork.
You must also include the signature of someone called the certificate provider. This is a third party who is known to you, the donor, and is not one of the appointed attorneys. The presence of the certificate provider is to act as a safeguard against undue pressure or coercion. They are there to confirm that you know what you are doing and are not being pressured by family or friends to create the LPA. There are restrictions on who can act as a certificate provider.
The LPA document must be completed and signed in a particular order, and all the signatures require independent witnesses. Any errors in the way the form has been completed will mean rejection. Each LPA has a unique reference number and, once registered, can be accessed by a third-party organisation with your permission and a unique activation key.
Review your LPAs every four or five years. You might need to appoint replacement attorneys if your original appointees can no longer act because they are too old or infirm or have died.
How you choose to use an LPA depends upon your health and financial circumstances. Some donors only use LPAs for significant decisions or end-of-life treatment. In contrast, others use them for more day-to-day decisions like personal welfare and care. Reviewing your LPAs regularly will ensure they suit your circumstances which may change as you age.
Invoking an LPA
Whether you are using the online service or have an older LPA and are relying on hard-copy documents, you will need to make a list of who to contact in the first instance. If you are using paper copies, you will need a certified copy of the LPA, which a solicitor can produce. Most organisations will not accept photocopies. The online service saves both time and expense.
Financial institutions may include:
- Mortgage company or landlord for a rented property
- Banks
- Building Societies
- Pension providers
- Department for Work and Pensions (DWP) if the donor receives benefits
- HMRC
- Utility companies
- Insurance companies
- Investment institutions
For a health and welfare LPA, consider including the following:
- Doctors
- Other healthcare professionals
- Friends and family members
- Social workers
- Care workers
- Dentist
Most organisations will want proof of the power of attorney before they recognise your appointment. Unfortunately, each organisation has a different process. You can usually find out the information they require online, or there is sometimes a dedicated department that deals with LPAs. You may also need to prove your identity and residence status as well as evidence of the power of attorney. You can verify your UD with your passport or driving licence and your proof of residency via a utility bill.
The LPA may limit what you can do with that institution or organisation, so you should understand what the scope is before you speak to any third party. A financial institution has the power to report you to the Office of the Public Guardian (OPG) if they think you are not acting in the best interests of the donor or if there are any transactions which they are concerned about even if they do appear to fall within your remit as defined by the LPA.
Changing from an EPA to LPA
An Enduring Power of Attorney or EPA is the predecessor to the new LPAs. LPAs in their current form appeared on 1st October 2007, so if you have a power of attorney which precedes that date, then it is probably an EPA.
Enduring Powers of Attorney are similar to LPAs but are less flexible, so you can’t appoint replacement attorneys.
The only way to override an existing EPA is to create one of the new style LPAs.
