Most people live their day to day lives without thinking what would happen if they suddenly became incapacitated, for example in an accident or sudden ill-health such as a stroke. Others have some inclination that they are losing their mental capacity as it is a slow process as old age starts to take a hold. Either way, thought should be given to who will manage their affairs, whether temporary or permanently. This is called a power of attorney. It authorises a specific individual called an attorney to take decisions on behalf of another either generally or in limited circumstances. These are not to be confused with an ordinary power of attorney, which may be granted on behalf of someone who still has mental capacity but may require a nominated person to sign a document on their behalf. A normal power of attorney ceases to have any effect when the person loses mental capacity. Enduring powers of attorney and Lasting Powers of Attorney are concerned with situations in which mental capacity is lacking or lost.
Lasting Powers of Attorney replaced Enduring Powers of Attorney from 1 October 2007. A lasting Power of Attorney is more flexible in that it allows the attorney to make a wider range of decisions on the donor’s behalf.
A Lasting Power of Attorney is an authority from the donor to the attorney to make decisions about the donor’s health, welfare, property and financial matters including when the donor no longer has mental capacity. There are two types: one allowing the attorney to make decisions about property and finance and the other to make decisions about health and welfare. A donor can appoint the same person to act as attorney for one or both and the donor can choose to create one type of power or both.
Generally, family and friends are appointed, though it is possible to appoint a professional executor such as a solicitor. Persons over the age of eighteen not bankrupt or a trust in relation to property. More than one attorney may be appointed and the donor can decide whether the appointment is joint or joint and severable. It is possible for the donor to specify some functions to be carried out jointly and others joint and severable although this can cause problems because an organisation may refuse to comply with an attorney’s instruction if it cannot assess whether the attorney is acting severally rather than jointly. If the donor does not specify, the appointment will be joint. Generally, it is advisable to appoint your attorneys jointly and severally.
While joint attorneys provide the donor with protection they must act together. This means that if one dies, becomes bankrupt or ceases to have capacity the enduring power no longer has any effect whereas joint and several attorneys can act independently of one another so provide more flexibility but may lead to a loss of protection for example of the donor’s property. A joint and severable power of attorney continues even after one of the attorneys has lost capacity or died.
A successor or substitute attorney can be provided by the donor in specified circumstances, for example upon the death, loss of capacity of bankruptcy of an attorney.
Lasting Powers of Attorney can only be created by an individual over the age of eighteen with mental capacity. It must be made in accordance with statutory regulations and contain prescribed information:
The Lasting Powers of Attorney, Enduring Powers of Attorney and Public Guardian Regulations 2007 specify the format of each lasting power of attorney. It is important that the form be filled out correctly or it may be refused registration if it is defective. It is especially important that the donor and attorneys sign in the right order and in the presence of an independent witness, who could be your solicitor.
It may not be possible to create a new lasting power of attorney once the donor has lost capacity. Form LP12 issued by the Office of the Public Guardian provides detailed instructions on how to make and register a lasting power of attorney.
The form provides a section for the donor to set out their preferences in certain situations. However, it will be important for the donor to ensure that a clause has been added to the power of attorney to provide the attorneys with the ability to use their discretion in managing financial funds.
A Power of Attorney is a document in which one person (the Donor) appoints another person (the Attorney) to act for him or her. There are many reasons why you might decide to use a power of attorney. For example, if you are going to be out of the country for a lengthy period of time, you might want someone to do your banking while you are gone. If you are approaching old age, you may want to give a Power of Attorney to a person you trust so that he or she can manage your property for you.
In England and Wales there are 2 main types of powers of attorney. The first type is called an ordinary or general power of attorney. With ordinary powers of attorney, Donors can appoint attorneys to look after financial/property matters only. Unless otherwise specified, an ordinary power of attorney will come to an end when the Donor loses capacity.
The second type of power of attorney is called a Lasting Power of Attorney (LPA). With an LPA, Donors can appoint attorneys to act in either personal welfare matters or property matters. An LPA only becomes effective once it has been registered. Provided the LPA was created while the Donor was mentally capable, the LPA can be registered at any time. The LPA replaced the Enduring Power of Attorney in October 2007.
An Enduring Power of Attorney (EPA) is a type of power of attorney which allows the Donor to appoint someone to act on the Donor’s behalf in matters that relate to the Donor’s property and affairs. The EPA remains valid even if the Donor later becomes mentally incompetent. In contrast, a Lasting Power of Attorney (LPA) allows the Donor to appoint someone to act on the Donor’s behalf in matters that relate to the Donor’s property and affairs and/or the Donor’s welfare.
If the Donor becomes unable to make financial decisions, the Enduring Power of Attorney must be registered before it can be used or, if it is already in use, before it can continue to be used. Lasting Powers of Attorney will become effective as soon as they are registered and they may be registered any time after completion.
Lasting Powers of Attorney replaced Enduring Powers of Attorney in October 2007 when the Mental Capacity Act 2005 came into force. However, Enduring Powers of Attorney which were created before October 2007 will still be valid.
An LPA for Property and Affairs allows your Attorney to manage your property and affairs. This may include buying or selling your home, managing your investments or carrying on a business.
An LPA for Personal Welfare allows your Attorney to make health and welfare decisions for you. This may include consenting to certain medical treatment or making decisions about where you live.
Your Property and Affairs Attorney can make decisions on your behalf while you still have capacity as well as when you lack capacity. Your Personal Welfare Attorney can only make decisions on your behalf when you lack the capacity to make them yourself. Both powers of attorney only take effect when they have been registered with the Office of the Public Guardian.
Your Attorney has the following responsibilities:
An LPA made in England and Wales is not legally binding for use in other countries (including Scotland and Northern Ireland). It is up to institutions (such as hospitals and other health care facilities) in other countries to decide whether to recognise the LPA.
Your Attorney cannot do any of the following on your behalf:
More information on these exclusions is available in the Mental Capacity Act 2005, sections 27 – 29. You can view the legislation by clicking here
Your LPA can be registered at any time after it has been completed and properly signed. The advantage to having it registered right away is that the LPA can be used by your Attorney whenever it is needed. If a long time passes before your LPA is registered, your circumstances may have changed and your LPA may no longer reflect your needs. If this is the case, you will not be able to modify your signed and completed LPA. You will have to create a new LPA.
Either the donor or the donor’s Attorney(s) may apply to register the LPA as long as the proper forms have been completed and all people who are to be notified have been notified.
If your document is intended to be used in a foreign nation, you may have to have it notarised, “authenticated” or “legalised”. This is a process whereby a government official (e.g., the Secretary of State, the Foreign Office, the Office of the Attorney General – depending on where you live) certifies that the signature of the authority by a Notary Public on your document is authentic and should be accepted in the foreign nation.