Key terms before we start:
“LPAs” – Lasting Power of Attorneys.
“OPG” – Office of the Public Guardian. This is the government body, like the Court, that oversees the registration and management of LPAs.
Donor – This is the person who is making the LPAs.
Attorney – The person(s) being appointed to act on behalf of the Donor.
Replacement Attorney – The person(s) being appointed to act in the event the first named Attorneys are unable to act on a permanent basis.
Person(s) to Notify – These are people you might like to notify that you are making the LPAs. This is used as a safe guarding tool as these individuals are given an opportunity to raise any concerns they may have.
Preferences – This is guidance to your Attorneys and uses words such as ‘I would like’ or ‘I would prefer’, e.g. “I would like to have my hair cut once a month.”
Instructions – These are legally binding and should be considered with great care as they can sometimes make the LPAs unworkable. They use words like ‘must’ and ‘have to’, e.g. “My Attorneys must consult my accountant before selling my property.”
Certificate Provider – This is a person who can properly say that the Donor has the requisite mental capacity to make the LPAs. If you use a solicitor, the solicitor will usually be the Certificate Provider.
There are two types of LPAs: one for your Property & Financial affairs; and one for your Health & Welfare. It is possible to make just one type of LPA and not the other but it is usually advisable to have both types because they often interlink, for example; your Attorney can use your Health & Welfare LPA to decide what type of care you will receive but then they might need a Property & Finance LPA to help them pay for that care.
All LPAs have to be registered with the Office of the Public Guardian [“OPG”] before they can be used.
Property & Finance LPAs
This LPA allows your Attorneys to deal with your financial affairs including:
- The buying and selling of property;
- Operating bank accounts;
- Dealing with tax affairs;
- Paying bills on your behalf; and
- Claiming benefits.
You can choose to give this power to your Attorneys as soon as the LPA is registered or defer their powers until such time as you may lose mental capacity to deal with your own financial affairs. If you choose to defer your Attorneys’ powers until such time as you may lose mental capacity then your Attorneys will not be able to exercise the LPA in the event you are simply unwell or unable to tend to your affairs yourself. They will be required to prove you do not have the requisite mental capacity before they can exercise their powers under the LPA.
It is important to note that, if you choose to give this power to your Attorneys as soon as the LPA is registered, it does not mean that you lose the authority to manage your own finances. The Attorneys are merely an addition to yourself in terms of being able to sign documentation for you and indeed the documents do not have to be used unless you wish your Attorneys to start assisting you, or you are unable to act for yourself.
Health & Welfare LPA
This LPA allows your Attorneys to deal with your health and welfare affairs including:
- Where you should live;
- Your day-to-day care including your diet and dress;
- Whether to give or refuse medical treatment; and
- Who can and cannot visit you.
Unlike the LPA for Finance & Property, the LPA for Health & Welfare can only be used by your Attorneys in the event you are unable to make these decisions for yourself.
The LPA for Health & Welfare also deals with Life Sustaining Treatment, such as; life support machines, artificial nutrition or hydration, organ transplants and even cancer treatments. You can choose to either give the power to your doctors to make these decisions, or alternatively, you could give the power to your Attorneys to make these decisions. You should consider that if you are in a hospital you may not be familiar with the doctors treating you and they might be unaware of your specific wishes. If you choose to give this power to your Attorneys instead, you should discuss with them what your wishes would be in these circumstances.
Choosing How Attorneys Act
If you are naming more than one Attorney, you have the option to select whether your Attorneys act Jointly, Jointly and Severally or Jointly for some decisions and Severally for others. Whilst this provides the security that all your Attorneys must agree, you should consider this option carefully as, if one of your Attorneys was temporarily or permanently unavailable, it could prevent your remaining Attorneys from being able to act.
When Attorneys are appointed to act Jointly, all named Attorneys must agree before a decision can be made on your behalf. Whilst this provides the security that all your Attorneys must agree, you should consider this option carefully as, if one of your Attorneys was temporarily or permanently unavailable, it could prevent your remaining Attorneys from being able to act.”
When Attorneys are appointed Joint and Severally, all of your Attorneys can act together or separately. This means any one Attorney could make decisions on your behalf without consulting the others. This allows the LPAs to be used even if one or some of the Attorneys are unavailable, however, you must be completely comfortable with the idea that just one of your Attorneys could make decisions on your behalf.
Concerned About Your Attorney Abusing Their Power?
It is imperative you trust your Attorneys as the LPAs do grant them a lot of power. An Attorney cannot be someone under the age of 18 and they shouldn’t be someone who was previously made bankrupt.
Your Attorneys are obliged to act in your best interests, to consult any guidance that you give in the documents and they must follow the general law. They will be obliged to follow the provisions of the Mental Capacity Act 2005 in particular and encourage you to make decisions for yourself as far as you are able. Your Attorneys also have the following duties:
- not to take advantage of the position of the attorney;
- not to delegate unless authorised to do so;
- to act in good faith;
- to treat your matters as confidential;
- to comply with directions of the Court of Protection;
- not to disclaim without notifying you, the other Attorneys, and the Office of the Public Guardian; and
- to comply with the relevant guidance.
In relation to your LPA for Finance & Property, your Attorneys also have a duty to:
- keep accounts, and
- keep the donor’s money and property separate from their own.
The OPG can, and do, perform spot-checks on Attorneys or Replacement Attorneys to make sure they are acting correctly. They will be expected to provide receipts and accounts for any financial activity which will be scrutinised by the OPG. These spot-checks can be random or the result of an individual raising concerns with the OPG about the way an Attorney appears to be acting.
The OPG has the right to revoke the powers granted to any Attorney if they think an Attorney has behaved improperly. In extreme cases, Attorneys could also face criminal charges as a result of the improper use of their powers.
Instructions and Preferences
The LPAs allow you to include Instructions or Preferences to your Attorneys. Preferences use words such as “prefer” and “would like” for example, “I would like to have my hair cut every two weeks”. Preferences are not binding on your Attorneys but they should keep them in mind.
Instructions use words such as “must” and “have to” for example, “my Attorneys must consult my accountant, Mr Smith, before selling any property”. Instructions should be included with extreme caution as it is possible for them to make the LPAs unusable, for example; if your Accountant Mr Smith passes away or is uncontactable then your Attorneys wouldn’t be able to sell your property at all.
People to Notify
The LPAs allow you notify individuals (not otherwise named in the LPAs) that you are making LPAs and the details of those you have chosen to appoint. This is so that if the individuals you are notifying have any concerns about your choice of Attorneys or your capacity to make LPAs, these concerns can be raised before the LPAs are registered. It is not necessary to notify anyone and it may not always be appropriate to do so.
Both types of LPAs will require a certificate provider. The role of the certificate provider is to discuss Lasting Powers of Attorneys with you and ensure that you have sufficient capacity to make the appropriate document. This does not have to be a solicitor and could be someone over the age of 18 whom you have known well for over two years. However, where the Donor has any medical condition that may affect the mind, it is usually advisable to have a solicitor act as the Certificate Provider to help mitigate any claims in the future that the Donor did not have the requisite mental capacity.
Do I have to use a Solicitor to Prepare LPAs?
It is perfectly possible to prepare LPAs by yourself online. This could save you considerable costs in using a solicitor. However, we often see that problems usually arise with LPAs after the Donor has lost capacity, meaning it is too late to rectify the issues. A solicitor is legally trained to anticipate these issues and can help you avoid them. We would always strongly recommend using a solicitor when any of the following apply:-
- You are not appointing your spouse as an Attorney;
- You are appointing some of your children, but not all, to act as Attorneys;
- You are not appointing any family as Attorneys but instead have elected for friends;
- You suffer with a condition that might affect your mental capacity; and
- You wish to include detailed Instructions in the LPAs.
What are Common Errors with DIY LPAs?
We asked Jade Gani (Solicitor & Head of Private Client) what are some of the common errors she sees when lay persons create LPAs online. Here’s what she had to say:
“The most obvious errors are usually where the Donor and/or Attorneys do not sign or date correctly – often in the wrong order. We also see a lot of mistakes made by witnesses – or no witnesses at all! If you are careful, these errors can be easily avoided by lay persons.
The errors which aren’t so obvious nor easy to avoid, such as failing to include specific instructions in the LPAs for managed investments, can prove more costly in the long run. Without this specific instruction, for example, Attorneys are often unable to deal with the Donor’s managed funds (such as those managed by a Financial Advisor). If the Donor’s house needs to be sold to pay for care it is especially important the Attorneys have this power so they can mitigate the costs of care as much as possible. Failing to include this instruction could therefore costs thousands!”
I Have Prepared LPAs Online But Now I am Worried I Might Have Missed Something
Do not fret. If you have prepared LPAs yourself but have concerns you may have missed something, our solicitors are happy to perform a free LPA review and will let you know if they feel there might be any issues. In some cases, our solicitors might recommend preparing new LPAs to deal with any issues that might become apparent.