Making a Will is very thoughtful forward planning, to care for those we love when we are no longer here. But what about you, whilst you are still here? There are a number of reasons why you might need someone to make decisions for you, or act on your behalf. This could just be temporary, for example, if you are in hospital and need help with everyday things such as making sure that bills are paid. Or you may need to make more long-term plans, for example, if you have been diagnosed with dementia.
Reasons to make a Lasting Power of Attorney (LPA):
A common misconception
Many people believe their spouse/partner or adult child automatically has the right to look after their affairs if this happens. It often comes as huge shock to the family when they discover that legally they cannot simply step in and deal with these matters! If you lose your mental capacity then your loved ones cannot automatically look after your affairs. Your bank accounts could be frozen, bills could mount and family stress levels could rise rapidly.
The Court of Protection
You may have read the horror stories in the press about the “secret” Court of Protection taking over the management of the assets of people who lose their mental capacity. Whilst such reports are without doubt over-exaggerated, it is the case that if you don’t have an LPA and you lose your mental capacity, a “Deputy” must be appointed by the Court of Protection to look after your affairs. This process is often a long drawn out procedure, taking many months, very costly and often very frustrating. All this can be avoided by appointing someone to look after your affairs whenever you cannot.
The two types of LPA
- Property and Finance – this LPA covers decisions about the donor’s (the person who creates the LPA) property and financial affairs.
- Personal Welfare – this LPA permits your attorney(s) to make decisions for you in respect of your personal affairs and welfare. It can include the power for the attorney to give or refuse consent to medical treatment if this power has been expressly given in the LPA.
One difference between the two types of LPA is that a Property and Finance LPA can be used whilst the donor still has mental capacity (although only with his or her permission, of course), whereas a Personal Welfare LPA can only be used if the donor has lost capacity. With both types of LPA, as donor you can restrict or specify the types of decisions that the attorney can make, or allow the attorney to make all decisions on your behalf. You can choose anyone you trust to act as your attorney provided they are over 18 and not bankrupt when they sign the form. You can appoint more than one person to act. You can also appoint replacement attorneys. If you appoint more than one person, you can choose whether they can act together or together and independently. You can state that your attorneys must act together for some decisions but for others they can act independently. Your attorneys must follow the principles set out in the Mental Capacity Act when they are making decisions or acting on your behalf. They must always act in your best interest and consider your needs and wishes as far as possible.
When possible, attorneys should take all practical and appropriate steps to help the donor make the particular decision. An attorney must consider the donor’s past and present wishes. The attorneys must not take advantage of the donor’s position to gain any benefit for themselves. They must keep any entrusted money and property separate from their own and from that of other people and they must keep accounts of any dealings on the donor’s behalf. Attorneys must keep affairs relating to the LPA private unless otherwise stipulated on the LPA form or if it can be demonstrated that it is in the donor’s best interest to pass on information to somebody else. For example, if you’re setting up a Property and Finance LPA you can request that the attorney regularly provides you with details of how much income you have and how much is spent.
This offers you an extra layer of protection, as if you lose mental capacity these details can be sent to a family member or your solicitor. A person can refuse to act as attorney but if they agree to take on the responsibility, they immediately become subject to the duties of an attorney. Failure to comply could mean the LPA is cancelled and in some cases the attorney may be taken to court on charges of fraud or negligence. The role carries with it power and responsibility and should not be entered into lightly. Once LPAs are drawn up they need to be registered with the Office of the Public Guardian before they can be used. This does take some time, but nowhere near as long as it takes to have a Deputy appointed by the Court of Protection.
If you have a business and you become ill or have a serious accident then you may find that your absence makes it difficult for your business to operate. Who will handle the finances and make the decisions on your behalf in your business if you are lying in a hospital bed? Or, worse still, if you are in a coma or have lost your mental capacity (even temporarily) after a stroke or similar illness? A business LPA is an essential document for anyone in business. You can have two LPAs: one appointing attorney(s) to act for you in your business and, if you wish, another appointing different attorney(s) who you want to act on your personal affairs which are not related to your business.
How NC Law Can Help You
We have a great deal of experience in preparing LPAs. Our specialist team will be able to talk you through the different options that you might want to include in your LPA. We know that sometimes making an LPA is not easy and that you want the whole thing to be dealt with quickly and painlessly: we can certainly do this for you. Whatever your wishes, we have the knowledge and experience to advise you and prepare an LPA which is right for you.