The benefits of drawing up a will are widely recognised. In doing so, you make provision for  the winding up of your affairs after death. This not only has advantages for those who will find themselves administering your estate, but also gives you peace of mind, knowing that you have selected as executors the individuals best suited for the role and have given them the necessary instructions.

There are also opportunities available to make provision in advance for the possibility of you becoming incapable of managing your own financial and welfare affairs during your lifetime. This becomes increasingly important as the risk of supervening mental incapacity grows through longevity, illness or accident. Less well known are the opportunities available to make provision in advance for the possibility of you becoming incapable of managing your own affairs during your lifetime. This becomes increasingly important as the risk of supervening mental incapacity grows through longevity, illness or accident. An ordinary power of attorney is not an effective provision because it is automatically revoked by mental incapacity – just at the time when it is most needed.

The Court of Protection has power to appoint people to manage your affairs, but the procedure can be costly and time-consuming. More importantly, you will have lost the right to choose who you appoint. will have the responsibility for looking after your affairs at a time when it is vital that they are dealt with efficiently and sympathetically. The better solution is, while mentally capable, to appoint someone to safeguard your interests and to act on your behalf if necessary. You can do this in the form of an Lasting Power of Attorney, also called an “LPA”.

Lasting Powers of Attorney

An LPA differs from an ordinary power of attorney in that it remains valid even after the donor becomes mentally incapable. At the time the power is given, the donor must be capable of understanding its nature and effect for it to be valid. It will be necessary to make separate LPA’s, one dealing with property and affairs’ and the other to cover ‘personal welfare’ decisions.  LPA’s were created by the Mental Capacity Act 2005 (MCA 2005), which covers England and Wales only. MCA 2005 provides a statutory framework to deal with situations where adults lack capacity to make decisions for themselves or who have capacity but want to make preparations for a time when they may lack capacity in the future. A Code of Practice supports the MCA 2005 and provides guidance and information to all those working under the legislation. Certain categories of people are obliged to have regard to the Code of Practice, including attorneys and those acting in a professional capacity, such as STEP members.

Property and affairs LPA

These are designed for you to appoint attorneys to make a range of decisions including the buying and selling of your house and other assets, dealing with your tax affairs, operating bank and building society accounts and claiming benefits on your behalf.

Personal welfare LPA

Attorneys appointed under this document can make decisions relating to your living accommodation and care, consenting to or refusing medical treatment on your behalf, and on day-to-day matters such as diet and dress.

Provisions common to both forms

Although there are two separate prescribed forms, both contain certain common provisions including statements to be completed by you setting out your details, the attorneys to be appointed and how they are to act, and details of any persons to be notified on the application for registration. The attorneys must state that they understand their duties and obligations. In addition, the legislation has introduced a person known as ‘the certificate provider’, either someone who knows you well or a professional person. The certificate provider must sign the form to confirm that they have discussed the contents of the LPA(s) with you on your own (if possible) and that they can state that you understand the purposes and scope of the LPA, no undue pressure or fraud is involved in the decision to make an LPA and there are no other factors preventing the creation of the LPA.

Registration

Both types of LPA must be registered before they can be used by your Attorneys and both can be registered while you still have mental capacity (unless it specifies to the contrary). However a Personal Welfare LPA can only be used when you no longer have the mental capacity to make particular decisions affecting your health and personal welfare.

Appointment of attorneys

Although LPA’s are detailed, they need to maintain flexibility so that you may appoint more than one attorney to act together, together and independently, or together in respect of some matters and together and independently in respect of others. If no selection is made then they must act together. If attorneys have to act together, then the LPA fails if any of the attorneys die or lose capacity (and also in some other circumstances). If they can act together or independently then the LPA will continue even if an attorney should die, etc. A replacement attorney may be nominated. You may grant general or limited authority. If general power is granted then the attorneys may manage all your property and affairs or make all personal welfare decisions. If any restrictions or conditions are to apply then they must be clearly stated. Where a STEP member or other professional is appointed as an attorney it is recommended that their current terms and conditions of business (including fees to be charged) are  discussed with and approved by you.

The attorney’s powers and duties

The attorney’s powers may be restricted and the LPA can specify that it can only come into force once you no longer have mental capacity (this applies in any case to personal welfare LPA’s). The attorneys only have limited powers to make gifts of your money or property, although the court may authorise additional giving. When making investment decisions, the attorney will need to take appropriate professional advice. An attorney may refuse their appointment by completing a specified form, which will need to be sent to you and copied to the other attorneys and the court. Attorneys must 0bserve the Code of Practice and STEP members and other professionals who are being paid for their services are required to display a higher standard of care and skill than a non-professional attorney.

The Court’s role

Both the Court of Protection and the Office of the Public Guardian (OPG) have roles to play – the Court of Protection can determine issues such as the validity of LPA’s, mental capacity (or the lack of it) and the registration and revocation of LPA’s. However the Court will expect attorneys to seek advice from STEP members and other professionals before involving the Court. The Court would need to be involved if it is necessary to appoint a deputy (formerly known as a receiver) where it is not possible to create an LPA, or a previous EPA or LPA or has been revoked. The registration of LPA’s is dealt with by the OPG, which will maintain a register of all LPA’s. Basic information about an LPA can be made available to anyone who makes a search of the register on payment of a fee (currently £25). The OPG should also be contacted if it is suspected that abuse is taking place or the attorneys are not acting in the donor’s best interests.

Your solicitor’s role

As can be seen, your solicitor  ill be involved in the initial process of advising you about LPA’s and they may also act as your certificate provider. Your solicitor will also be able to advise on the registration process. It may also be appropriate in some cases for your solicitor to be appointed as an attorney, often with a family member or a close friend. The above summary applies to English and Welsh Lasting Powers of Attorney made on or after 1 October 2007. Different rules apply in Scotland. This note has been prepared by the Society of Trust and Estate Practitioners (STEP), which brings together solicitors, accountants, barristers, bank trustees and probate practitioners who specialise in a particular expertise of this field of practice.

Why make a lasting power of attorney?