With life expectancy increasing many more of us will face challenges to our physical and mental capacity as we grow older. The Alzheimer’s Society estimates that, as of 2021, there are around 1 million people in the UK suffering from dementia, with that figure likely to steadily increase in the future.
Lasting Power of Attorney (LPA) can make life easier for both the person with dementia or other limited capacity, and their loved ones.
There are many myths and misunderstandings surrounding LPA and what powers it gives someone. In this article we will take a look at LPA, what it is and precisely what powers are associated with it.
What is the Lasting Power of Attorney (LPA)?
Lasting Power of Attorney is a legal document that allows you to choose a person or persons who you trust to act on your behalf in a legal capacity. You can only assign lasting power of attorney while you have the mental capacity to do so. Anyone over the age of 18 who has the capacity to make the decision can make an LPA.
There are two different types of LPA:
- Property & Financial Affairs – this will enable your attorney(s) to manage your finances.
- Health & Welfare – this will enable your attorney(s) to make decisions on your behalf about your healthcare and personal welfare.
Who can act as an attorney?
An attorney should be someone aged over 18 who is trustworthy and who isn’t bankrupt. You can appoint one or more attorneys and it’s always possible to appoint replacement attorneys. It can be advisable to appoint at least two attorneys, or one attorney and a replacement attorney who’s able to take over if your original choice can no longer enact their duties.
What decision can my attorney make on my behalf?
The precise powers of your attorney will depend on what authority you have given them in your LPA. If you’ve given them general authority, they will be able to make all the decisions that you would be able to make were it not for your incapacity.
LPA Property & Financial can deal with the following:
- Buying and selling property.
- Maintenance decisions at the property.
- Opening and closing bank accounts.
- Investment decisions.
- Making limited gifts.
LPA Health & Welfare can deal with the following:
- Where you should live.
- Treatment decisions.
- Dietary decisions.
- Who can have contact with you.
Incapacity can be temporary or permanent. For instance, a medical condition may render you temporarily incapable of making a considered judgement about treatment. Your attorney(s) would then be able to make the decision for you, and their powers to make decisions on your behalf would cease as soon as you recovered capacity.
With a degenerative condition such as dementia where there is little prospect of making a full recovery, the powers an attorney will hold will usually be permanent.
What can my attorney not do?
Despite this extensive set of powers that both types of LPA grant there are limitations to their powers.
For instance, the regulations regarding financial gifts state that the gift has to be proportionate to the size of your estate. They can be of a seasonal or customary nature, such as a birthday gift to a grandchild. If an attorney wishes to make a substantial gift, perhaps as a means to evade Inheritance Tax, they will need to get permission from the Court of Protection.
Your attorney cannot access your will prior to your death, nor can they make any amendments to your will unless you give them specific instructions to do so. If you have lost capacity and your attorney feels it necessary to either make or amend a will on your behalf they will need to make an application to the Court of Protection for a Statutory Will.
Your attorneys are not able to delegate their powers. This can make issues such as investments more complicated as it could involve delegating decision making to an investment or fund manager.
What can happen if an LPA isn’t in place?
If you don’t appoint an attorney to handle your affairs should you lose capacity to make decisions on your behalf it can create extra administrative complications for your loved ones. An application may need to be made to the Court of Protection to appoint a deputy on your behalf to make decisions for you. This can be a lengthy and complicated process, lasting over six months. In the meantime, there can be gridlock where important decisions that need to be made cannot be made.
If you’re considering the pros and cons of granting Lasting Power of Attorney to a family member or trusted friend then it’s sensible to receive impartial legal advice. The experienced Wills and Probate team at Mark Reynolds Solicitors can offer discreet and professional advice to help you make the best decision.
Contact us today with any questions you might have.