Recently there has been a substantial increase in the number of registrations for lasting powers of attorney (LPAs). Mitra Mann of Wright Hassall LLP explains what an LPA is and how it works.

What is a lasting power of attorney (LPA)?

A lasting power of attorney (LPA) is a legal document that names and registers the ‘attorneys’ who will make decisions that the ‘donor’ (the subject of the LPA) may be unable to make.

There has been a substantial increase in the number of registrations for LPAs recently with more people beginning to appreciate the importance of securing their finances, should they become too ill to handle them. This is largely due to an increased understanding of conditions like dementia and Alzheimer’s disease and the recognition that even though someone is physically well, they may be unable to make decisions because of an impairment of their mind or brain function.

In the eyes of the law, any such individual is said to lack ‘capacity’. In such a situation, there is no automatic right for a spouse, family member or even close friend to then start managing the individual’s affairs or make decisions on their behalf.

This is why it is crucial for someone to take control of their affairs in advance, at a time when they have the capacity to appoint someone they trust to make decisions on their behalf at a later date. This can be done by setting up an LPA. 

What is the difference between an enduring power of attorney (EPA) and a lasting power of attorney (LPA)?

Prior to October 2007, people made an enduring power of attorney (EPA) to give power to someone over aspects of their finances. An EPA could be used by the attorney(s) without registration. However, the attorney(s) had the obligation to register it with the Office of the Public Guardian (OPG) if the donor was becoming, or became, incapable of managing their own affairs.

However, from October 2007, EPAs were replaced by LPAs, which can be created for:

1. financial decisions
2. health and welfare decisions and these powers are given under two separate documents

What is a property and financial affairs lasting power of attorney?

With a property and financial affairs LPA, attorneys have the authority to make several decisions, including but not limited to:

• paying for the donor’s household, care and other bills
• claiming and using their benefits, pension etc
• maintaining and repairing their home
• managing their bank accounts and savings accounts
• using the donor’s money to buy things the donor needs or wants
• dealing with their tax affairs etc

A property and financial affairs LPA can only be used after it has been registered with the OPG. The LPA can be used even if the donor has capacity, with their permission, unless it contains restrictions.

What is a health and welfare lasting power of attorney?

With a health and welfare LPA, attorneys have the authority to make decisions including, but not limited to:

• day to day care, such as diet and clothing
• where the donor lives or their care placement
• giving or refusing medical treatment

A health and welfare LPA can only be used after registration. However, unlike the property and financial affairs LPA, this LPA cannot be used if the donor still has capacity.

How do you choose the right attorney(s)?

Whilst attorneys do not need any legal training, those chosen need to be trustworthy and reliable. The choice of attorney may vary depending on which LPA is being considered. For example, for a property and financial affairs LPA, the attorney must not be bankrupt and must know enough about handling financial matters to undertake their role effectively and competently.

The chosen attorney should be given the opportunity to consider whether they have the time to carry out this role and/or are able to work with another attorney, if the donor is appointing more than one.

How do you set up a lasting power of attorney?

Once both the donor and attorney(s) are satisfied, they will complete the appropriate form:

• LP1F for Property and Affairs
• LP1H for Health and Welfare

The form must be certified by someone else, known as a ‘certificate provider’, to confirm that the donor understands what they are doing, in particular what powers they are conferring on the attorney(s), and they are not being pressured into making the LPA. The certificate provider must either:

• have the relevant professional skills
• have known the donor well for at least 2 years

However, the certificate cannot be provided by:

• any of the appointed attorneys
• any replacement attorney
• a member of the donor’s or attorney’s family
• any business partner of the donor or attorneys or their employee
• an owner or manager or employee of the care home where the donor lives

Once completed, the form is submitted to the OPG for registration. A fee of £82 is payable per application and it generally takes around 6 to 12 weeks for the OPG to register the LPAs. 

What is a Court of Protection deputy?

Without a registered LPA there is no automatic right for anyone to start making decisions on behalf of someone who has lost capacity. This leaves them in a vulnerable position, with no one having the legal authority to pay their bills, pay for their care, maintain their property etc, which could place them at risk.

A solution would be to make an application to the Court of Protection, asking it to appoint a ‘deputy’ to manage the vulnerable person’s finances. A family member, friend or an appropriate representative from the local authority etc can apply to be appointed a deputy. However, the vulnerable person does not have any choice, as the decision as to who is appointed is ultimately made by the judge.

It should be noted, however, that this process is costly and lengthy. It involves issuing an application, notifying key parties and allowing them to respond before progress can be made. If there are no objections, a deputy can be appointed without the need for a court hearing and a straightforward application is likely to take between 4 to 6 months. If the application is contested, it could take 6 to 12 months before a deputy is appointed, potentially leaving the vulnerable person exposed to risks for a lengthy period.

What do attorneys need to consider?

Attorneys must carefully consider the scope of their authority when making decisions. They should familiarise themselves with the Mental Capacity Act 2005 and Code of Practice, which provides guidance on how to approach their decision-making responsibilities.

If an attorney is not acting in the donor’s best interests, the donor can revoke the LPA, even after its registration, provided they have the capacity to do so. If the donor, however, has lost capacity and there are concerns regarding the attorney’s conduct, the OPG may investigate them and the matter may be brought before the Court of Protection.

It is important for attorneys to be aware that they will require to seek the Court of Protection’s approval before carrying out certain financial transactions, such as making a substantial gift from the donor’s funds or making a will on the donor’s behalf. If they are unsure about their role or the scope of their powers, they should seek legal advice.

About the author

Mitra Mann is a senior associate in the contentious probate team at Wright Hassall LLP, specialising in contentious Court of Protection work.

See also

Everything you need to know about testamentary capacity

What is a partial intestacy and how does it occur?

Find out more

Make, register or end a lasting power of attorney (GOV.UK)

Lasting power of attorney forms (GOV.UK)

Deputies: make decisions for someone who lacks capacity (GOV.UK)

Mental Capacity Act 2005 (Legislation)

Mental Capacity Act Code of Practice (GOV.UK)

Image: Getty Images

Publication date: 11 June 2020

Any opinion expressed in this article is that of the author and the author alone, and does not necessarily represent that of The Gazette.