Unlocking Control: Understand LPA Key Points

Research by Scottish Widows has found that one in three people don’t understand how a Lasting Power of Attorney works. We help you understand the LPA key points.

A Lasting Power of Attorney or LPA is a legal document giving authority to a trusted attorney chosen by you. It enables them to deal with your affairs on your behalf should you ever lose the ability to manage them yourself.

Without an LPA, your loved ones could experience great difficulty in helping you and making decisions on your behalf. Should the need ever arise to do so.

Once you lose capacity, it is too late to make an LPA?

You must have mental capacity to make an LPA, therefore it is important to put this in place sooner rather than later. However it might not be too late if someone is in the early stages of mental deterioration. Provided they understand what they are signing and the implications, they may still be able to make an LPA. They need to take professional advice before signing. An expert will ascertain if they have capacity and the requisite level of understanding.

The best course of action is to make an LPA now and it can then be kept in case it is ever needed.

There are two different types of LPA that you can make

There are two different types of LPA and you can make either or both. They are:

• A property and financial affairs LPA
• A health and welfare LPA

You need an LPA even if you are married

A common misconception is that your spouse will be able to make decisions for you, should it become necessary. In fact, this is not the case. Should you lose the ability to manage matters, no-one can act on your behalf until they have the legal authority to do so.

This means that no-one can pay bills for you or arrange your care. If you have not made an LPA, your loved ones will have to apply to the Court of Protection for a deputyship order. In order for them to obtain authority to act on your behalf. This is a much longer and expensive process than putting an LPA in place.

Choosing the right attorney is crucial

Acting as someone’s attorney can be onerous. Dealing with someone’s property and financial affairs is time-consuming and can also be complicated. They are required to keep detailed records of all the transactions carried out on your behalf.

This means that it is very important to think about who you appoint to be your attorney. It needs to be someone who can manage the role and who will have the time to devote to it. Often advisable is selecting someone younger than yourself, so that they are likely to be able to take on the task should it be necessary in the future.

You can also appoint a back-up attorney, who can act if your first choice is unable or unwilling to do so if the time comes.

Attorney capabilities

Being appointed as someone’s attorney under a Lasting Power of Attorney means you will have the authority to make certain decisions on their behalf.

Attorney for property and financial affairs

A property and financial affairs attorney is generally responsible for dealing with all of the donor’s financial matters, to include:

• Managing bank accounts and investments
• Paying bills, to include tax liabilities
• Claiming benefits
• Home repairs and maintenance
• Renting out property
• Buying items on behalf of the donor

There are rules in respect of some transactions, such as the giving of gifts. Only gifts of a reasonable value can be given and these should be in accordance with what the donor can afford. It must be taken into account whether they gave similar gifts while they still had mental capacity.

The donor may have included some restrictions in their LPA, for example, in respect of the sale of their property. In any event, it can be advisable to seek consent from the Court of Protection before selling someone’s home on their behalf. You will also need consent if you wish to deal with tax planning for the donor. You cannot make or amend a Will for someone as an attorney.

An attorney cannot profit from their role. Neither are they allowed to purchase anything from the donor at below market rate, without the authority of the Court of Protection.

A property and financial affairs LPA can be used while the donor still has capacity. In most cases because they need help due to mobility issues.

Attorney for health and welfare

A health and welfare LPA can only be used when the donor has lost the ability to make their own decisions.

Unless the document contains any restrictions to the contrary, the attorney can deal with the following issues:

• Where the donor will live
• Who they will see
• What their day-to-day routine will look like
• What personal care they will receive
• What medical treatments they will have
• Refusal of life-sustaining treatment

You are required to act in the best interests of the donor in making decisions for them. You must consider what they would want if they were able to communicate this themselves.

When using a lasting power of attorney, an attorney should not make assumptions based on the donor’s age, appearance or condition, nor can the donor’s freedom be restricted.

Over four-fifths of over-55s do not have an LPA in place

Studies have found that some people are not sure when the right time is to make an LPA. It is good practice to make one straightaway. If it is not needed, then it need never be used. If it is ever needed, your loved ones will be able to ensure that you get the assistance you need with your affairs as soon as this is necessary. This could be in the event of a short-term incapacity, such as a stay in hospital, or a long-term loss of ability.

The LPA form includes safeguards, including the option to name individuals whom you would like to be informed before the document is used. You can also appoint two or more attorneys to act together if you wish.

Making an LPA is the best way of ensuring that your affairs can be managed seamlessly, should the need ever arise.

Contact Us

If you would like to speak to one of our experts call us FREE on 0800 781 6658 or email us at enquiries@estplan.co.uk

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