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Lasting Power of Attorney

Individuals can make a lasting power of attorney (LPA) which  enables them to choose a person to make decisions regarding their health and  welfare, and/or their property and finances. This replaces the previous system  of Enduring Powers of Attorney (EPA). Since October 2007 it has not been  possible to create an EPA. EPAs created before October 2007 remain valid and  can be used if the person who made the EPA loses mental capacity. It is not  possible to convert an existing EPA into an LPA.


Terminology

The donor of the power - the person creating the power who wishes to delegate decision making

The attorney - the person (s) or institutions appointed to act under the power to make decision on behalf of the donor


The Scope of LPAs

You  have the choice to determine whether your LPA should apply to personal welfare,  financial affairs or both. You can also make restrictions to the scope of the  LPA as it relates to particular financial matters or health and welfare  decisions e.g. to withhold permission to deal with a specific piece of property  or to make certain medical decisions.


Where  the LPA relates only to property and financial affairs, the attorney can be  either an individual or a trust corporation i.e. a bank. However, when the LPA  relates to welfare, only an individual can be appointed. Different attorneys  can be appointed by the donor to act in respect of welfare and property and  financial matters.


The  overriding principle is that an attorney appointed by an LPA is obliged to act  in the best interests of the donor at all times.


The Attorney's Powers under the LPA - Financial and Property Matters

These include:

  • Operating a bank account

  • Making investment decisions

  • Signing tax returns

  • Buying and selling property


There are also certain restrictions, for example the attorney cannot

  • Sign the donor's Will, or

  • Act for the donor as a trustee or executor, or

  • Make gifts, except in cases where the gift has historically been made by the donor


Powers Relating to Health and Welfare

Attorneys have the power to decide on issues such as:

  • Living and accommodation arrangements for the donor

  • Care and medical treatment

  • Decisions relating to the application or continuation of medical treatments.


An attorney cannot make decisions where:

  • The donor has the capacity to make the decision themselves

  • The  decision would be contrary to an LPA subject to valid "advance conditions" made by the donor concerning medical treatment at a time when they had full mental capacity

  • It relates to the refusal of life-sustaining treatment, unless the LPA expressly says so


The Procedure for Making an LPA

For the LPA to be valid it needs to be registered by the  Office of the Public Guardian.  This will  usually be done immediately after it is created.  This contrasts with the EPA which only  required registration when the donor was believed to have lost mental  capacity.


The LPA must be 'certified' under the LPA scheme. This means that the LPA certificate needs to be countersigned by someone who has either known the donor for at least two years or is a 'prescribed person' such a solicitor or a doctor. The certifier must confirm that, in his opinion, the donor understands the effect of the LPA and the purpose and scope of the documents they are signing and that the decision of the donor was not influenced by fraud or undue influence.


The donor can appoint one or more attorneys. The LPA should specify whether, if there is more than one attorney, the attorneys must act together or separately. It is possible to provide that certain decisions are made jointly e.g. the sale of a house and others jointly and severally (i.e. individually) e.g. operating a bank account. This contrasts with the EPA where the attorneys acted either jointly for all decisions or jointly and severally for all decisions.


Once registered, the attorney has the authority to act in accordance with the terms of the LPA. However for each decision that they need to make they must check with the donor if he/she can still play a part in making that decision otherwise they will not be acting in the donor's  best interests. In other words there is no definite time when the donor loses capacity absolutely. Capacity has to be assessed for each individual decision e.g. a donor may not have the capacity to decide if they want to sell their house but has the capacity to withdraw a weekly amount of cash from his bank account. Third parties, such as banks or doctors, will need to see a copy of the document before they will accept an attorney's instructions and will need to satisfy themselves that the donor is unable for each transaction to play a part in the decision making process. An LPA can be revoked by the donor at any time, provided they have the mental capacity to do so.


What If You Don't Make an LPA?

If you lose your mental capacity and do not have an LPA in  place, an application to the court will need to be made on your behalf for someone  to be appointed as your Deputy. This is a far longer, more expensive and more  complicated process. Whoever is  appointed has to comply with extensive reporting obligations to the court on an  ongoing basis. The LPA is an important  opportunity for a donor to make the decision themselves as to who should  represent them in the event of deterioration in their mental capacity.


How We Can Help

Our experienced Wills and Probate team are ready to help you make provisions for your own future, or that of a loved one. We offer a full Will writing service, and can help you in all matters relating to Probate and Lasting Powers of Attorney.

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