Myths about Lasting Powers of Attorney
Setting up Lasting Powers of Attorney is in our view as important as making a Will. It enables trusted family or friends to step in if a person is not able to manage their affairs for some reason. Many are put off by beliefs that they’ll instantly lose control if they set up Powers of Attorney or that it’s something that’s not worth doing. Solicitor Holly Chantler has the answers.
“I have an Enduring Power of Attorney”
Lasting Powers of Attorney (“LPA”) replaced Enduring Powers of Attorney (“EPA”) on 1 October 2007. EPAs made before that date remain valid and can continue to be used. However, EPAs only relate to property and financial affairs whereas LPAs relate to property and financial affairs and/or health and welfare matters.
“If I make a property and financial Affairs LPA, I’ll immediately lose control of my finances”
Your LPA cannot be used until it has been registered with a government organisation called the Office of the Public Guardian (OPG). You retain full control and authority over your finances (and health and welfare) notwithstanding the existence of a LPA (whether registered or not).
Your attorneys can only act on your behalf if you specifically authorise them to do so, for example if you are not able to sign a cheque due to physical frailty (subject to any conditions in the LPA), or if you are not able to take the decision in question due to mental incapacity.
In this second situation, your attorneys can only take a decision in your best interests and in accordance with the principles of the Mental Capacity Act as outlined further below.
“My attorneys cannot get together to sign things”
Where you have more than one attorney, you can appoint your attorneys to act jointly, which means they all have to agree every decision (including signing cheques), jointly and severally, which means that your attorneys can act independently from each other and would only require one signature (but they should still consult with each other), or jointly for some decisions and jointly and severally for other decisions, which is a combination of the two previous options.
Our advice would usually be to appoint attorneys on a joint and several basis as this is the most practical on a day-to-day basis and the LPA would continue if one of your attorneys became permanently unable to act for you. If you have concerns about attorneys acting on their own, you should consider carefully whether they are the best people to appoint as attorneys for you.
“I don’t need a health and welfare LPA”
Health and welfare LPAs are incredibly important and would be advised in almost all situations.
They can only be used if you lack mental capacity to take the decision in question. In the absence of a health and welfare LPA (or Court of Protection order), no-one is authorised to act on your behalf, regardless of their relationship to you.
“If I make a health and welfare LPA, someone else can overrule my end of life wishes”
A health and welfare LPA is one of the best ways of ensuring that your wishes are fulfilled. In the absence of a health and welfare LPA, your family will have no legal authority to take a decision for you or to even be involved in any decisions about your care.
Making a health and welfare LPA ensures that your family will be involved with your care and making end of life decisions on your behalf (subject to any conditions you may include in the LPA).
“I already have an Advance Decision”
Advance Decisions are different to LPAs, although it is possible to have an advance decision and a health and welfare LPA. An advance decision (sometimes known as an advance decision to refuse treatment, an ARDT or a living will) is a record of your wish to refuse a specific type of treatment at some time in the future.
“My attorneys do not have to account for their actions”
Attorneys must act in accordance with the terms of the Mental Capacity Act 2005 and the Code of Practice. The principles of the Mental Capacity Act are:
Your attorneys must assume that you can make your own decisions unless they can establish that you cannot do so.
Your attorneys must help you to make as many of your own decisions as you can. They cannot treat you as unable to make the decision unless all practicable steps to help you to do so have been made without success.
Your attorneys must not treat you as unable to make the decision in question simply because you make an unwise decision.
Your attorneys must make decisions and act in your best interests when you are unable to make the decision in question.
Before your attorneys make the decision in question or act for you, they must consider whether they can make the decision or act in a way that is less restrictive of your rights and freedom but still achieves the purpose.
The Code of Practice includes further guidance about what attorneys can and can’t do and include the following duties:
- Duty of care
- Duty to carry out your instructions
- Duty not to take advantage of their position and not benefit themselves
- Duty not to delegate decisions
- Duty to act in good faith
- Duty to keep accounts
- Duty to keep your money and property separate from their own
Attorneys can only make gifts from your funds on customary occasions providing the value of each gift is not unreasonable having regard to all the circumstances, including the value of your estate. Larger gifts must be approved by the Court of Protection. The Court of Protection oversees and protects the affairs of individuals who are no longer able to manage their affairs regardless of the existence of a LPA.
The OPG has far-reaching powers of authority and can investigate the actions of your attorneys and bring proceedings for their removal where appropriate.
“Once I’ve made my LPA, I can’t change it”
Whilst you can’t alter an existing LPA, you can always cancel it if you are not happy with it (providing you have mental capacity to do so).
You can also cancel the appointment of one attorney where you have appointed more than one and they are appointed on a joint and several basis. Ultimately, the Court of Protection can order the cancellation of it on your behalf, if you are not able to do so yourself and it is deemed to be in your best interests.
“I only need to think about a LPA if I am diagnosed with dementia”
Everyone should consider making a LPA, regardless of their age and/or medical condition(s). It is not advisable to leave it until a diagnosis of any type, for reasons including the following:
- It may not be possible for you to make a LPA due to a loss of mental capacity. For example, you may have suffered a serious stroke or accident and are no longer mentally capable of making a LPA.
- LPAs are not only about assisting individuals living with dementia. You may face living with another medical condition such as a serious stroke, brain injury or physical impairment and would like someone to be able to assist you with day-to-day financial management.
- Having a LPA now will avoid having to worry about making one in the future if difficult circumstances arise in the future, for example if you are taken ill.
“My wife has just been diagnosed with dementia so I don’t need to make a LPA myself”
For the reasons given above, it is important to consider making a LPA in any situation.
“My spouse can make decisions on my behalf if I lack capacity”
It is only possible for someone to act on your behalf if you have made a LPA (or an EPA prior to 1 October 2007 but this will only be in respect of property and financial affairs). This includes spouses.
“Only family can be attorneys”
Subject to a few exceptions (such as bankruptcy and incapacity), you can appoint anyone over the age of 18 to be your attorney and they do not have to be family members.
“If there isn’t a LPA in place my family can just make an application to the Court of Protection instead”
Applications to the Court of Protection are lengthy, expensive and your family (or whoever makes the application) will be limited in the decisions they can take for you.
Having a LPA in place takes away the anxiety and expense of having to make an application to the Court of Protection at a time when your family/friends need to help you. Furthermore, it is incredibly unusual for the Court of Protection to issue an order relating to health and welfare and so your family/friends will only be authorised to take such decisions for you if you have made a health and welfare LPA.
“I can just add a family member or friend to my account”
Adding a family member or friend as a co-signatory or joint account holder is not sufficient if you later lack capacity to manage your affairs and a property and financial affairs LPA or Court of Protection order will still be required.
“Making a Will is much more important than making a LPA”
Making a LPA is just as important as making a Will. They serve two separate purposes and should not be considered as an either/or. LPAs relate to management of your affairs during your lifetime whereas Wills relate to the distribution of your estate following your death.
“My attorney can change my Will”
Attorneys have no authority to change your Will. If you no longer have capacity to make a Will and it is considered to be in your best interests to do so, the Court of Protection can authorise a Will to be made on your behalf.
“My attorney can continue to use my LPA after my death”
Your LPA will cease to have effect on your death and only your personal representatives (appointed by Will or by the Probate Registry) can act on behalf of your estate. Attorneys who continue to deal with your affairs using a LPA will be held accountable for any actions they take.
Holly Chantler is a Senior Associate Solicitor in the Private Client department at Morrisons Solicitors LLP. She is a full professional member of Solicitors for the Elderly, the Society of Trust and Estate Practitioners (STEP) and is also a Dementia Friends Champion. Call Holly on 01737 854525 or email her for further advice and information.
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