What is Lasting Power of Attorney?
Thinking about Lasting Power of Attorney takes us on much the same journey as thinking about writing your Will. 1 – I’ll only need this when I’m old and infirm. Which will be never. 2 – Or, if I have some dreadful illness/dementia. Which will also be never. 3 – OR… I have a terrible accident losing all mental and/or physical capacity. Again… Never. Conclusion: I’m way too young/healthy/careful for an Lasting Power of Attorney, so I’ll get round to it one day when I’ve finished living life and have time for the paperwork of the aged. Which may be never.
The trouble with leaving things like making a Lasting Power of Attorney (or writing your Will!) is that when it’s too late it really is too late.
Over 350,000 adults were admitted to hospital in 2014 with a traumatic brain injury and, it’s predicted that by 2025 there will be 850,000 people in the UK living with dementia.
That’s 1 in 6 people over the age of 80 AND over 40,000 under 65’s affected by some form of dementia. Pretty sobering statistics. Numbers that make putting plans in place now – that will reduce stress and burden, emotionally and financially, from your family – into perspective. Life is unpredictable it just makes sense to be prepared for any eventuality.
What is Lasting Power of Attorney?
A Lasting Power of Attorney (LPA) is a legal document that lets you appoint one or more people – your attorney’s – to help you make decisions or to make decisions on your behalf when you are not mentally able.
In some cases, a person may still be able to make decisions, but need help with the practicalities. Making phone calls or physically getting to the bank for example.
Why put one in place?
By appointing people that you trust and that know you gives you control over what happens to you if, for example, you have an accident or an illness and can’t make decisions at the time they need to be made (you ‘lack mental capacity’).
In order to put an LPA in place you must be 18 or over and possess ‘mental capacity’ ie the ability to make your own decisions.
How is ‘capacity’ decided
The Mental Capacity Act 2005 was created to empower and protect individuals who may lack the mental capacity to make their own decisions concerning their health and welfare. And, as such sets out a two stage test for mental capacity:
1) Does the individual concerned have an impairment of, or a disturbance in the functioning of, their mind or brain, whether as a result of a condition, illness, or external factors such as alcohol or drug use?
2) Does the impairment or disturbance mean the individual is unable to make a specific decision when they need to? Individuals can lack capacity to make some decisions but have capacity to make others, so it is vital to consider whether the individual lacks capacity to make the specific decision.
But I’m too young for a Lasting Power of Attorney…
No matter what age we are there are just some things that we feel we just aren’t QUITE old enough for…. Writing your Will, joining Saga, elasticated trousers, varifocals (maybe!) and putting a Lasting Power of Attorney in place all make the list (probably).
But, LPAs are not just for the old OLD. Those poor souls holed up in a nursing home somewhere watching endless re runs of Midsomer Murders on a TV that’s not quite loud enough… they have very practical applications for young and old alike. Like writing your Will, life insurance and your pension, it’s simply prudent life planning.
There is a commonly help assumption that, should you be unable to, a friend or relative can just stroll into your bank and access your money, pay your bills etc. The Police have a name for this. Its fraud.
HOWEVER, if you had a Property and Finance (more on this later) LPA in place then your appointed attorneys COULD step in and access your money and pay your bills for you on a temporary basis. It might not sound much but it could mean the difference between falling behind with your creditors and well, not.
What happens if you lost capacity and DON’T have Lasting Power of Attorney in place
Like dying without a Will – intestate – can leave your family with an expensive and complex situation to deal with, losing mental capacity without an LPA in place can be just as much of a headache. It is not possible to put a ‘retrospective’ LPA in place as you MUST possess mental capacity at the time of registering.
So, if you’ve lost capacity your family will have to apply to the court of protection to have someone appointed as your ‘deputy’. As is the way with these things this will come at significant cost, you’ll actually have to pay hefty annual fees too, and can take a considerable amount of time.
Types of LPAs
There are two types of LPA’s available. While it’s prudent to take both it’s entirely up to you, if you decide at a later date you want the other then you can apply for it. BUT… remember this MUST be done before you lose capacity.
Health and Welfare
This gives your attorney’s the power to make decisions about things like:
- Your daily routine, eg washing, dressing, eating
- Medical care
- Moving into a care home
- Life-sustaining treatment
Property and Financial
This gives your attorneys the power to make decisions about… you guessed it money and property, including:
- Managing a bank or building society account
- Paying bills
- Collecting benefits or a pension
- Selling your home
Invoking an LPA
We often have people telling us that they don’t want to put an LPA in place as they fear that they’re attorneys will steal their money. Firstly… if you think this WHY did you choose them in the first place? And, secondly the Health and Welfare LPA is only invoked when you have lost mental capacity, the Property and Finance LPA you can choose if this is to be invoked straight away OR when it’s needed.
How to put an LPA in place
1 – Choose your attorneys
You can choose to have one or multiple attorneys, typically people choose 2 or 3 attorneys, plus a couple of replacements… just in case! If you have more than one you must decide if they have to act jointly – making any decisions together OR jointly and severely which means any attorney can act.
Your attorneys can be anybody over 18, that you trust – a couple would normally appoint each other and their children should they have any. When putting a Property and Finance LPA in place you are not permitted to appoint anyone who has been declared bankrupt or is subject to a Debt Relief Order.
- How do they manage their own financial affairs
- Will they be comfortable to make decisions on your behalf
- How well they know you
- If you trust them to make decisions in your best interests
2 – Complete the forms
You can complete your LPA online at the gov.uk website, you can download the forms here too – find out more here.
A LPA is a powerful legal document and the forms, although the Government has recently made the process easier, are still fairly complex so you may want to consider using a professional company to help complete these for you.
3 – Register your Lasting Power of Attorney
You now need to register your LPA with the Office of the Public Guardian (OPG) – if you have filled the forms in online you may have registered it at the same time. You’ll know if you have they will have asked you for some money!
Providing there are no mistakes on your forms it takes between 8-10 weeks to register your LPA and it’s only officially registered with the OPG has stamped REGISTERED on every page. Your attorneys can register it for you – you’ll be notified if someone does try to do this and you can object to the registration if you wish.
BEFORE your register your LPA you need to complete an LP3 form and send it to all the people that you need to notify. They then have 3 weeks to raise any objections with the OPG.
4 – PAYMENT
It costs £110 to register EACH LPA – so if you do both; Health and Welfare AND Property and Finance that’s £220.
Mistakes cost! If you’ve made a SMALL mistake, then OPG will allow you to make the change and apply again for the small fee of just £55. Per LPA….
Can I change or end my Lasting Power of Attorney?
Of course! To completely end your LPA you need to make a deed of revocation in writing to the OPG. You can also make a partial revocation if you would like to change your attorneys.
Your LPA can also be ended if your Attorneys die, lose mental capacity themselves, is removed by the court of protection or, in the case of an Property and Finance LPA, is made bankrupt.
So, is a putting a Lasting Power of Attorney in place a good idea. How could it not be?
We’ve all heard the term AGEING POPULATION but what does it mean? We are certainly living longer lives than any other generation before us, in fact the largest percentage growth of the population is in the over 85’s demographic, with many of those making it to within sniffing distance of their telegram from the Queen. But, with 1 in 6 of those over 80’s affected by dementia these longer lives we are living are not necessarily better. Thousands of people are, and, millions will be, living with serious illness. In the case of a degenerative disease such as dementia we will require other people to make important decisions about our health and our finances for. Without an LPA in place this is simply not possible.
So, its time to stop thinking that putting a Lasting Power of Attorney in place is something that only OLD people need – as, are we ever truly OLD – and think of it as just simple sensible planning (trying desperately not to use the cliched ‘Future-proof your life’ but that’s exactly what it does!).
Lasting Power of Attorney preparation service
Future Legal Service offers a full Lasting Power of Attorney preparation service. Your forms will be prepared and checked by our fully STEP accredited Head of Legal and returned to you to be registered at your convenience. To find out more please contact us on 01322 664885 or email@example.com.