The pandemic saw a drop in the number of Lasting Powers of Attorney (LPAs) registered, but this number is starting to pick back up now with a 19% increase year on year in 2022.
Now, halfway through 2023, it will be interesting to see whether this number continues to soar.
In this article, Wills & Tax Executive Rhiannon Stevinson outlines what an LPA is, why they’re so popular and whether you need a lawyer to draft one.
What is a Lasting Power of Attorney?
A Lasting Power of Attorney is a legal document that gives trusted people the ability to act on your behalf if you are unable to.
In order for a Lasting Power of Attorney to be valid, it will need to be signed by all the parties involved and a certificate provider. A certificate provider will sign to confirm that you:
- Understand the document you are signing,
- Have the capacity to make the document, and
- Are doing this of your own free will
Once the Lasting Power of attorney is signed it will need to be registered with the Office of the Public Guardian, a branch of the court also known as OPG.
My colleague Lee Young has outlined what a LPA is in more detail, the different types and what to include. You can watch Lee discuss this in video format below, or read on for the text version...
How long is an LPA valid for?
After registration, an LPA is valid until you have passed away (at this point your Will would come into effect).
Unfortunately, the courts have a very large backlog which means it can take several months to get a lasting power of attorney registered. As such, it’s a good idea to prepare any documents in advance.
A Lasting Power of Attorney can be revoked if you change your mind at a later date but it is essential that you choose an attorney that you trust.
Related: What happens to my estate if I die without a Will?
Why would someone need a Lasting Power of Attorney?
Once a Lasting Power of Attorney is registered, it gives you peace of mind that if anything happens and you are unable to manage your own affairs then your attorneys can step in and help.
Lasting Powers of Attorney for Property and Financial affairs can also be set up to be used as soon as it is registered so your attorneys can act in relation to your finances.
This could be especially useful if you are unable to speak to financial institutions such as banks over the phone or in person or if simply you would prefer someone else to help!
What happens if you lose mental capacity without a Power of Attorney?
Unfortunately, no one knows what is around the corner. Lasting Powers of Attorney can only be made whilst the person who is giving the authority (known as the Donor) has capacity to make the document.
If a person does lose capacity without a LPA in place, it can leave the family in a very difficult position. An application to the court would need to be made which can be quite expensive and can also take around a year to produce.
At this time the family may not have any authority to manage their loved one’s affairs and can essentially be ‘stuck’ waiting for the deputyship order to be made.
Added complications could also arise if the loved one needs to go to a care home. The family could have little control over the care home that is chosen, and they could also struggle to access funds making paying the care home very difficult.
Sadly, the people who see the full value and importance of having a Lasting Power of Attorney are those who have had to seek a deputyship order for their loved one as a LPA was not made.
What decisions can a Lasting Power of Attorney make?
There are 2 different types of LPA, one that manages Property and Financial Affairs and another that handles Health and Welfare decisions.
The Property and Financial Lasting Power of Attorney can authorise your family to help you manage your financial affairs. This could be:
- Handling any pension payments,
- Dealing with bank/building society matters,
- Liaising and paying utility companies, or even
- Selling your property if it was needed.
A Health and Welfare Lasting Power of Attorney can only be used if you lose capacity in relation to any medical decisions and your welfare. This could be:
- Life sustaining treatment such as a serious operation,
- Medical treatment you are to be received,
- Where you live, and
- Your daily routine such as haircuts and your diet.
Related: How can I pass on my estate and assets when I die?
What is the difference between Power of Attorney and Lasting Power of Attorney?
A Power of Attorney (also known as a general Power of Attorney) can be completed for trusted people to act on your behalf whilst you have capacity.
This power does not extend to situations where you have lost capacity, so you may end up needing a Deputyship order.
A general Power of Attorney is not always recognised by institutions and some may still require you to complete the Lasting Power of Attorney.
They can however be useful to have in place whilst waiting for a LPA to be registered by the court.
What is the difference between Enduring Power of Attorney and Lasting Power of Attorney?
An Enduring Power of Attorney is an older version that existed before Lasting Powers of Attorney were introduced.
An Enduring PoA differs from an LPA as it can be used before it has been registered by the court if the person giving authority has capacity. As soon as that person loses capacity, any Enduring Power of Attorney would need to be registered with the OPG.
Enduring Power of Attorneys are still valid and can still be used, however, some people prefer to get an LPA in case it is ever needed for loss of mental capacity.
Who is the best choice for Power of Attorney?
The most important decision when choosing an Attorney is who you trust to act on your behalf.
It is best practice to review the suitability of each person you are considering. The attorney can live far away or even in a different country and still act but it may be more practical for them to be local to you.
You can appoint up to 4 attorneys in your LPA as well as replacement attorneys if your attorney is unable to act (such as if they have passed away).
It is preferred to have more than one person named as your attorney (whether this is 2 people acting together as attorney or one person appointed and one replacement).
Can Lasting Power of Attorney be applied for after someone has lost capacity?
No, they can only be made when a person has capacity. If they have lost capacity without a Lasting Power of Attorney in place, then a deputyship order will need to be applied for.
Can a Lasting Power of Attorney change a Will?
Your attorneys cannot change your Will with a Lasting Power of Attorney.
However, there are other ways to change your Will. In my colleague Heather Varley’s article, she outlines how you can do this and when is best to update your Will. Read it here.
Can you sell a property with power of attorney?
Yes, your attorneys can sell your property, but they must always be acting in your best interest when acting on your behalf.
Related: Selling your home – what documents and disclosures do you need?
Is it best to use a solicitor for lasting power of attorney?
You can complete a Lasting Power of Attorney yourself, but they are long documents which can be complicated and overwhelming. As a result, people who complete their own LPA often make mistakes – which can be costly in the long run.
When considering who to be appointed as a certificate provider, it can be simpler to instead have your lawyer complete this provided they are satisfied to do so.
Finally, a lawyer can ensure that the instructions given inside your Lasting Power of attorney are tailored to help best suit your needs such as who looks after your beloved pet if you lose capacity.
Wills & Tax Specialist Lawyers
At Frettens, our bright team of experts have vast experience in drafting all kinds of power of attorney and are best placed to assist you in reflecting your best interests within your LPA.
We would be happy to discuss your circumstances with you over the phone or in person and provide advice tailored to your needs.
If you would to speak to a member of our team, or ask any questions, please don’t hesitate to get in touch on 01202 499255. We offer a free initial chat for all new clients.
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