Give 'em the power

Above: Garry Warman

Following the demise of Enduring Powers of Attorney, just what are your options now they’ve been replaced by Lasting Powers of Attorney?

Most of us are fully aware of the virtues of having a Will and the need to appoint executors, but a large number of us do not consider what would happen if we become mentally incapable of managing our affairs. It is estimated that, at present, around 700,000 people have dementia and this figure is likely to increase significantly year on year.

Following the introduction of the Mental Capacity Act 2005, it is no longer possible to create an Enduring Power of Attorney (EPA). EPAs have now been replaced by Lasting Powers of Attorney (LPA).

In previous articles we have encouraged everyone still capable of giving consent to enter into an EPA before it was too late. In this month’s article, we discuss your options following the demise of the EPA.

What are Lasting Powers of Attorney?

LPAs actually consist of two different types of Power. The first, Lasting Power of Attorney, Property and Affairs, is similar to the old EPA: your attorneys are appointed to deal with all financial matters for you.

The second Lasting Power of Attorney, Personal Welfare, allows you to appoint somebody to make decisions for you in relation to your health and medical treatment.

You can enter into both or just one type of LPA. Different attorneys can be appointed under each Power, but you should consider that some decisions to be taken by your attorneys may require consideration of both financial and personal matters.

What is involved in the creation of an LPA?

The LPA form is much longer than an EPA. Part A is completed by the donor providing personal information, and the details of the appointed attorneys. You can also specify ‘named persons’, to be notified when an application to register the LPA is made.

Part B is the certificate provider’s statement. The donor must choose either someone who has known them personally over the last two years, or a professional with the necessary skills and expertise to be able to provide the certificate. The certificate provider confirms that you have understood what you are doing and that you have not been pressured to do it.

Part C contains the attorney’s statement and is completed by each attorney appointed.

Who should I appoint as my attorneys?

By appointing someone as your attorney, you are giving them a great deal of power over your affairs, and it is most important that you only appoint people who you trust. If you do not have any suitable friends or family to appoint, you can appoint professionals to act as your attorneys although it may not be appropriate to appoint professionals under a Personal Welfare LPA, unless you are well known to them.

Are there any restrictions on what my attorneys can do?

You can restrict the power your attorneys have over your affairs, either in relation to financial matters or personal decisions. However, be careful you do not restrict them too much so as to reduce the effectiveness of the Power. If you enter into a Personal Welfare LPA, then you must state whether you wish your attorneys to have the power to consent to or refuse life-sustaining treatment on your behalf.

How does an LPA become valid?

LPAs cannot be used until they are registered with the Office of the Public Guardian (OPG). They can be registered by the donor or the attorney(s).

What happens if I do not enter into an LPA and lose my capacity?

If you do not already have an EPA entered into before 1 October 2007 or an LPA before you lose your mental capacity, then the only option for anyone to deal with your financial affairs is by the Office of the Public Guardian appointing someone to act as your Deputy (previously a Receiver).

The Deputy cannot deal with any Personal Welfare issues, so is not as comprehensive as the LPA. The Deputy may not necessarily be someone you know or who you would want to deal with your affairs. The process is lengthy and expensive and the Deputy’s powers to manage your affairs can be limited.

While LPAs are more complicated, time consuming and expensive than EPAs, we would recommend to everyone that they are preferable to the alternative, which is a Deputy being appointed.