Lasting Power Of Attorney Explained

EPAs vs LPAs

Prior to 1 October 2007, it was possible to appoint an attorney with a document called an Enduring Power of Attorney (EPA). These documents are still valid, but they can only cover the finances of the person making the appointment.

Lasting Powers of Attorney (LPAs) were introduced on 1 October 2007. These have replaced EPAs, and allow for two different types of power of attorney:

1. A Property and Financial Affairs LPA
2. A Health and Welfare LPA

You can have one or both LPAs in place. A Property and Financial Affairs LPA allows your attorneys to do things like pay your bills, manage your bank accounts, collect your pension and sell your home.

A Health and Welfare LPA covers issues such as the choice of care home, preferences as to food and dress code, maintenance of distancing from estranged family members, medical treatments and the ending of life sustaining treatment.

How does an LPA work?

When you make an LPA, you are called the donor. You appoint an attorney to make decisions on your behalf. The choice of attorney is important. You can have between one and four named persons and you can specify the order in which they can act, or whether they must all act together.

The powers will need to be registered with the Office of the Public Guardian in Birmingham and only then will they be effective.

The Financial Power of Attorney can operate in parallel with your own decision making, if you are happy for the attorney to start using it straight away, or it can be stored with your Will to be used at a later date. A Health and Welfare Power of Attorney can only ever be used when you have lost your decision-making faculties.

Why make a Lasting Power of Attorney?

Powers of Attorney are not beneficial just for those just of a certain age or who are losing their mental capacity (meaning the ability to make decisions). You may have or be about to suffer from a physical disability which will prevent you from getting out and about and to the bank. Arthritis can affect the ability to write, and macular degeneration can affect the ability to see what has been put in front of you to sign. Road accidents and some diseases can lead to you being out of action for many months, possibly in a coma or on a ventilator.

The question you have to ask yourself is this: “if that happened to me, how would my money be accessed so that my day-to-day bills can continue to be paid and my care costs met?” The answer is clear. Your money cannot be accessed by anyone other than yourself, unless you have a Power of Attorney in place.

What happens if I don’t make an LPA?

Banks have been known to freeze an account when they become aware that one of the parties to the account has lost their decision-making faculties. With the event of GDPR (General Data Protection Regulations), care providers and authorities, utility companies and the DVLA will not talk to your relative without seeing a Power of Attorney. These documents assist family members to keep things going until you get back on your feet, or to take over and protect assets permanently.

For those who have not prepared and signed Powers of Attorney there is a long stop procedure whereby relatives can make an application to the Court of Protection for one of their number to be appointed as a deputy. A deputy is the same as an attorney, but they have different reporting responsibilities. They must submit annual accounts to the Office of the Public Guardian, who will supervise them for an annual fee. All families would prefer to operate the finances of a loved one under a Power of Attorney rather than under a deputyship.

Do I need an LPA if I have a Will?

We regularly hear people say that they do not need to make a Power of Attorney because they have appointed Executors in their Will. However, this is not true. Appointments under Wills only become effective once the Will writer has passed away. Powers of Attorney cover a person’s lifetime and cease to be effective on the death of that person. Wills and Powers of Attorney are separate regimes: one covering life and one covering death.

Attorney responsibilities

The Court of Protection has supervisory powers. They can remove attorneys who have misbehaved, order them to repay monies, cut them out of Wills and bankrupt them. Attorneys cannot benefit themselves, but sometimes make poor judgements when they have not had professional advice.

At Aticus Law, we ensure that your attorneys understand their responsibilities, so that they are less likely to break the rules on tax planning, gifting and paying themselves a salary for acting as attorney. This is part of our standard service when we are employed to draft and register Powers of Attorney.

Speak to our power of attorney solicitors

If you would like to make a Lasting Power of Attorney, or you would like to know more about LPAs, contact us at Aticus Law.

Call us or email us today to book a consultation with one of our experts.