Whilst we focus a majority of our day to day efforts on helping individuals maximise their current and future lifestyle, inevitably, we also need to consider putting provisions in place in the event of something unexpected or unwanted taking place.
There has been considerable coverage of the desperate and difficult position Kate Garraway has found herself in following her husband’s, Derek Draper, battles with Covid.
Not untypically, Kate discovered that many of their bank accounts, insurance policies and car were in Derek’s sole name, all of which resulted in Kate being unable to manage the family finances without a Lasting Power of Attorney (LPA) in place.
We’ve enlisted the help of expert Private Client lawyer, Amy Lane, to answer the most frequently asked questions relating to Lasting Powers of Attorney.
Lasting Power of Attorney
Q: I have heard that I can make a Power of Attorney but I do not know what this means. Is it the same as a Will?
A: A Will is only effective on death, whereas a Power of Attorney takes effect during your lifetime and ceases to be effective on death.
A Power of Attorney is a legal document whereby you formally give power to individuals called your attorneys. There are different types of Power. Two Powers you will commonly hear reference to are Enduring Powers of Attorney (EPAs) and LPAs.
Q: I have an Enduring Power of Attorney (EPA), but I have heard these are no longer valid. Is this correct?
A: The Mental Capacity Act 2005 came into force on 1 October 2007, introducing the LPA. Any valid EPA made before 1 October remains so, but it is no longer possible to make an EPA. Instead you would need to make a LPA.
Q: So what is an LPA?
A: There are two types of LPA: Property and Financial Affairs LPAs deal with financial matters and replace Enduring Powers of Attorney; and Health and Welfare LPAs cover health and welfare issues such as where the donor (the person making the LPA) should live, arrangements for day-to-day care and consenting to or refusing medical treatment.
Q. How do I make a Lasting Power of Attorney?
A: It is advisable to seek legal advice about the preparation of LPAs, as this can be relevant to the assets that you hold, particularly if you have business interests. You can use the Government online tool or ask a Solicitor to prepare them for you. Each LPA is submitted and registered separately.
Q: My wife and I made EPAs appointing each other as sole attorney. She is sadly now losing mental capacity. Do I need to take any action?
A: You have a duty as your wife’s attorney to register the EPA with the Office of the Public Guardian. We can help you with the registration and the formalities to which you will need to adhere. You should also make an LPA to ensure you are not left without an attorney to help you, as your wife will no longer be able to act using the Power.
Q: I have an EPA, so does this mean I do not need to make an LPA?
A: You may still want to think about making a Health and Welfare LPA. This would complement an existing EPA and mean that your attorneys can help you with your property or financial affairs and your health and welfare decisions if help is ever required.
An EPA would need to be registered if the donor becomes incapacitated, so there could be a delay before attorneys can undertake substantive decisions.
Q: I have an EPA but I have changed my mind about the people I have named as my attorneys. Can I just change that without making an LPA?
A: No. You will need to make an LPA appointing new attorneys. Ideally you should sign a Deed of Revocation to cancel the EPA. If you do not wish to make an LPA but wish to end the Power given by the EPA, at the very least you should sign a Deed of Revocation to cancel the EPA.
Q: Can I appoint more than one person to act under an LPA?
A: You can appoint more than one person (an attorney) to help you using the LPA.
For example, attorneys can be appointed to act either jointly, jointly and severally (which means they can act independently of each other) or even jointly in relation to some decisions and jointly and severally in relation to others; it is possible to appoint replacement attorneys; and a register of LPAs is maintained with the aim of limiting the scope for abuse of power by attorneys.
If you want to appoint your spouse, it is advisable to appoint someone else alongside your spouse, be that jointly or jointly and severally, or with the second person being a replacement attorney.
Q: Can I provide for replacement attorneys in case my first choice is unable to act when the time comes?
A: Yes, the LPA form provides for replacement attorneys who can take over in the event your main attorney becomes incapable of acting for you or dies before the LPA is needed.
Q: Once I have made an LPA, can it be used straightaway to help me?
A: Before an LPA is used it must be registered with the Office of the Public Guardian, either by the donor or by the attorneys.
A Property and Financial Affairs LPA can be used at the request of the donor while he has capacity, with the attorneys taking complete control if he subsequently loses capacity.
A Health and Welfare LPA can only be used when the donor lacks mental capacity to make his or her own decisions, and the Act requires that an individual be given every reasonable opportunity to make a decision for themselves before they are considered to lack capacity.
Q: Why should I make an LPA?
A: By making an LPA as well as a Will, you will ensure appropriate management of your estate during your lifetime as well as on death.
Should you become either physically or mentally incapacitated in the future, you will already have taken all possible steps to make an emotionally difficult time easier for yourself and your family.
It would also avoid your family having to make an application to the Court to be appointed as a deputy, which is a much more time consuming and expensive exercise.
If you have a question about Lasting Power of Attorney, please get in touch.