Power of Attorney - Do You Need One?

Powers of Attorney have been serving the public for centuries. They are powerful legal documents which allow an individual (the Donor) to appoint a person of their own choice (an Attorney), to look after their affairs should they at a later stage no longer wish to make these decisions or lack the capacity to manage their affairs themselves.

Consumer group Which? claims the public have a poor understanding of the current system of Lasting Powers of Attorney (LPAs), with a survey having found:

• Some 85% said they know what an LPA is, but only 15% said they would give someone else power of attorney over their affairs.

• This could be explained by 16% mistakenly thinking they would lose access to their financial accounts immediately after an LPA is registered, rather than when they fall ill.

• Some 70% of those surveyed who did not have an LPA said they were healthy so did not need one.

• And 77% of people incorrectly thought an LPA could be set up at any time in life, when actually after you are incapacitated, it involves your loved ones applying for deputyship, a complicated and costly court process.

Why would You Need a Power Of Attorney?

If you were to become mentally incapacitated as a result of an illness or an accident, then without a power of attorney in place, the ONLY way your financial affairs can be managed is by an application being made to the Court of Protection for a Deputyship order.

The applicant must provide personal information about themselves, their family, their own finances and the relationship with the person they wish to help care for. Medical evidence as to capacity will also need to be obtained.

This process costs a considerable amount of money and can take anything between 12 weeks and 10 months, by which time your finances could be seriously damaged.

Even worse, a Judge will make the final decision as to who is appointed as the Deputy, and this may not be who you would have wished to manage your affairs.

The appointment does not even have to be a family member. The Court could decide to appoint a Panel Deputy [a retired Solicitor or Barrister who works for the Office of the Public Guardian (OPG) ] or a Local Authority.

While the Court of Protection is important to safeguard the interests of people who don’t have close friends or family, if you want your loved ones to be able to care for you and make decisions on your behalf, you should ensure that you make an LPA while you are still able to do so.

Setting up a power of attorney allows you to plan in advance:

• The people you want to make those decisions for you (your Attorneys).

• The decisions you want to be made on your behalf e.g. life sustaining treatments.

• How you want your Attorneys to make those decisions e.g. jointly.

Once the power of attorney is registered your Attorneys can make financial decisions on your behalf and they must follow the principles as set out in the Mental Capacity Act when making these decisions.

Your Attorneys are free to act on your behalf without involvement from the OPG, unless a concern is raised as to how the Attorney is acting.

Minimal personal details are required for both the Donor and the Attorney to set up a power of attorney, and it is a much less intrusive process.

Setting up a power of attorney is also a much quicker process than applying to the Court for a Deputyship order.

Lasting Powers Of Attorney

Two new attorneys known as Lasting Powers of Attorney (LPAs) were introduced in 2007 by the Mental Capacity Act and replaced the old system of enduring powers of attorney (EPAs) from that point.

Lasting Power of Attorney for Property & Financial Affairs

This allows the persons appointed (the Attorneys) to make decisions about paying bills, dealing with banks and investments, arranging and collecting benefits and even selling property on behalf of the Donor.

Lasting Power of Attorney for Health and Welfare

This allows the Attorney(s) to make decisions for the Donor such as care issues, where the Donor lives, and, where the Donor wishes, giving or refusing consent to life sustaining treatment.

As the name of the power suggests (‘lasting’) both powers continue to be valid even after the Donor loses capacity.

Once registered, a Lasting Power of Attorney for Property and Financial Affairs can be used by the Attorneys at any time, HOWEVER a Lasting Power of Attorney for Health and Welfare can ONLY be used when the Donor has lost mental capacity.

Being appointed under a Property & Financial LPA does not give the authority to make Health & Welfare decisions, and vice versa. However, the same attorney can be appointed under both types of LPA (or indeed different attorneys).

Before 1 October 2007 there were two types of power of attorney available.

Ordinary or traditional power of attorney

This is most suitable if the donor only needs cover for a temporary period, for example a hospital stay or holiday, or if they find it hard to get out, or they just want someone to act for them. It only covers decisions about financial affairs and is only valid whilst the donor has mental capacity.

Enduring power of attorney (EPA)

EPAs were available in England & Wales up until 1 October 2007. EPAs arranged before this date are still valid. An EPA covers decisions about property and financial affairs, and it only comes into effect when the donor loses mental capacity whereby the attorney must register the EPA before they can act. No new EPA can be granted after 30 September 2007.

Lasting Powers of Attorney have replaced Enduring Powers of Attorney in England, Scotland & Wales, but not Northern Ireland.

Making & Registering A Lasting Power Of Attorney

You can make a lasting power of attorney (LPA) online or using paper forms. While the online process is meant to streamline things, we find it can be cumbersome, especially if you are setting up multiple LPAs at the same time.

The signing process for the LPAs is also very specific and the forms need to be signed in a specific order to prevent invalidation.

You will most probably know who you want as your attorneys. You will also have to decide if there should be replacement attorneys.

You will need to decide how the attorneys should act and whether you wish to give guidance or instructions to your attorneys on how you want them to act. We prefer guidance over instructions as complicated or unworkable instructions could also lead the OPG to refuse the registration.

You will also need a Certificate Provider, someone known to you for at least 2 years or has the relevant professional skills to enable them to confirm that you understand the significance of your LPA. They will also need to certify that no undue pressure or fraud is involved in the making of the LPA.

Once you have made the decision to make your Lasting Power of Attorneys, we recommend they are registered immediately with the Office of the Public Guardian (OPG).

An LPA can only be used after it is registered with the OPG.

Failure to register your LPA documents straight away may mean that the information it contains could be out of date. This may invalidate the LPA and the OPG could then later refuse to register the document.

The charge for Registering an LPA is set by the OPG but can be reduced, or even waived entirely, depending on the Donor’s annual gross income.

If you would like us to prepare the documentation for you and talk you through the options please let us know. Taking professional advice can prevent problems later on, especially if you’re unsure of the process or your affairs are complex.