Powers of Attorney

When you make a Will it is a good time to consider making a Power of Attorney. The benefits of drawing up a Will are widely recognised. By doing so you make provision for the winding up of your affairs after death. Not only does this have advantages for those who administer your estate but it also provides you with peace of mind in the knowledge that you have selected as Executors the individuals who are best suited for the role and have provided them with the necessary instructions.

The opportunities available to make provision in advance for the possibility of you becoming incapable of managing your own affairs during your lifetime are less well known.

A Power of Attorney enables you to appoint someone to look after your affairs and depending upon the type of Power of Attorney used it may be effective before you become mentally incapable or if you become mentally incapable or, in some cases, in both situations. The foresight of completing a Power of Attorney can be a great relief to your relatives as it can lessen the burden of responsibility for them and smooth the way for someone to make decisions on your behalf.

what is a Power of Attorney?

It is a document created by a deed whereby one person (who we call the “Donor”) gives another person (who we call the “Attorney”) power to act on his or her behalf. There can be more than one Attorney appointed.

are there different types of Power of Attorney?

Currently there are three types of Power of Attorney which may be relevant. These are:-

• An Ordinary Power of Attorney
• An Enduring Power of Attorney
• A Lasting Power of Attorney

what is an Ordinary Power of Attorney?

An Ordinary Power of Attorney is a simple document whereby you can appoint an Attorney to deal with your financial affairs generally or to deal with a specific matter eg. the sale of a property during a period of absence abroad.

Ordinary Powers of Attorney have been used infrequently during the last twenty years mainly as a consequence of the introduction of the Enduring Power of Attorney in 1986 by the Enduring Powers of Attorney Act 1985 (see below).

As a consequence of the Mental Capacity Act 2005 (the MCA) it is possible that there may be a resurgence of interest in the Ordinary Power of Attorney. This is because it is likely to be a cheaper option than the Lasting Power of Attorney. However it is essential to appreciate that apart from limited exceptions (eg. for use in connection with a property sale) an Ordinary Power of Attorney is not an effective provision because it is automatically revoked by the mental incapacity of the Donor. This is just at the time when it is most needed and in such a situation unless you have completed an Enduring Power of Attorney (prior to 1 October 2007) or a Lasting Power of Attorney (with effect from 1 October 2007) it will be necessary for someone (usually a close relative) to apply to the Court of Protection to be appointed as a Deputy. Such a procedure can be costly and time consuming. We would urge careful consideration before contemplating the use of an Ordinary Power of Attorney for long term management.

It should be noted that an Ordinary Power of Attorney relates solely to your financial affairs. It does not provide an Attorney with authority to make personal welfare or health decisions on your behalf.

what is an Enduring Power of Attorney?

An Enduring Power of Attorney (EPA) is a special form of Power of Attorney introduced by the Enduring Powers of Attorney Act 1985.

An Enduring Power of Attorney has an advantage over an Ordinary Power of Attorney in that an EPA is not automatically cancelled as a consequence of the Donor becoming mentally incapable but survives or endures through that mental incapacity to enable the Attorney to deal with the Donor’s affairs subject to a safeguard of the Attorney having to register the EPA with the Court of Protection.

The MCA repealed the Enduring Powers of Attorney Act 1985 with effect from 1 October 2007 and accordingly it is not possible to create an EPA subsequent to 30 September 2007. However any EPA validly created prior to 1 October 2007 will remain in force unless it is cancelled by either the Donor or the Court of Protection or is cancelled as a consequence of the death of the Donor.

In the event that the Donor of an existing EPA is becoming or has become mentally incapable of managing his or her affairs then the Attorney has a legal duty to register the EPA with the Court of Protection.

It should be noted that the Enduring Powers of Attorney Act 1985 is reproduced, almost in its entirety, under Schedule 4 of the MCA with amendments to take into account the changes to the Court of Protection and the new role of the Office of the Public Guardian (the OPG).

It should be noted that an EPA only relates to the financial affairs of the Donor. Like the Ordinary Power of Attorney it does not provide an Attorney with authority to make personal welfare or health decisions on behalf of the Donor.

what is a Lasting Power of Attorney (LPA)?

An LPA is a legal document that a Donor makes using a special form. It allows the Donor to choose an Attorney (or Attorneys) that they trust to make decisions on their behalf at a future time when either they lack the mental capacity or no longer wish to make those decisions themselves. The decisions that an Attorney could make may be about the Donor’s property and affairs or about their personal welfare. This depends upon the type of LPA created.

Unless you made an EPA prior to 1 October 2007 (which can only deal with your financial affairs) making an LPA is now the only way to make plans for a time in the future when you may lack the capacity to make decisions for yourself. It should be noted that a LPA has to be registered with the OPG before it can be used.

There are two types of LPA:

• The Property and Affairs LPA
• The Personal Welfare LPA

The Property and Affairs LPA

A Property and Affairs LPA allows the Donor to appoint an Attorney to manage their finances and property whilst they still have capacity to make decisions for themselves or in the event that they should become incapable of making those decisions. An Attorney appointed under a Property and Affairs LPA can make any decision the Donor could make about his property and affairs such as buying or selling property, managing investments, paying bills, collecting benefits or other income unless restrictions are included within the LPA.

Careful consideration should be given to the inclusion of any such restrictions as you should bear in mind that there may be a time when these decisions need to be made for you (eg. should you lack the capacity to make the decision yourself) and it may be necessary for an application to be made to the Court of Protection for the decision to be made on your behalf. This would involve time and cost.

An Attorney would not be able to make decisions about a Donor’s personal welfare unless they have also been appointed as a Personal Welfare Attorney using a separate LPA. It should be borne in mind that sometimes decisions in relation to property and affairs will overlap with personal welfare decisions - for example if it is necessary for you to move to residential care. In such a situation the Property and Affairs Attorney will need to liaise with the Personal Welfare Attorney. It is possible to appoint the same Attorney under both LPA’s.

A Property and Affairs LPA is similar to an EPA.

The Personal Welfare LPA A Personal Welfare LPA allows the Donor to appoint an Attorney to make decisions on their behalf about their personal welfare.

A Personal Welfare LPA may only be used when the Donor lacks the capacity to make a decision for himself. Once again it has to be registered with the OPG before it can be used.

Unless conditions are contained within the Personal Welfare LPA once it has been registered and you lack capacity your Attorney will be able to do anything that you can do now in relation to your personal welfare. This may include:-

• Where you should live and who you should live with
• Your day to day care including diet and dress
• Consenting to or refusing medical examinations and treatment
• Arrangements needed for you to be given medical, dental or optical treatment
• Assessments for and provision of community care services
• Deciding, alone or with others on the level of care which you may require

If you want your Attorney to have the power to make decisions about “life sustaining treatment” this has to be expressly provided within the Personal Welfare LPA.

who can make an LPA?

Anyone aged eighteen years or over with the necessary capacity to do so can make a LPA.

who can be an Attorney?

This depends upon the type of LPA being created. If the Donor is making:

• A Personal Welfare LPA then anybody over the age of eighteen years can be an Attorney provided that their details are correctly completed on the LPA form;
• A Property and Affairs LPA then anybody over the age of eighteen years or a Trust Corporation can be an Attorney. However the Attorney must not be an undischarged or interim bankrupt. If an Attorney becomes bankrupt in the future this can result in the LPA being cancelled if it has been registered with the OPG

what are the options if I appoint more than one Attorney?

If you wish to appoint one or more Attorneys you can appoint them to act in different ways. They may be appointed to act:-

• Together

This means that all Attorneys appointed in the LPA must agree on a decision or sign a relevant document.

• Together and Independently

This enables each Attorney to act on their own when making decisions on your behalf but also provides that they can act together. This enables one Attorney alone to decide on a particular issue.

If Attorneys are appointed to act together and independently it is recommended that they liaise with each other regarding decisions to avoid any conflicts.

• Together in respect of some matters and together independently in respect of other matters

This means that all Attorneys are required to agree on certain specified decisions but they can act independently when making other decisions.

If this option is being used the instructions will need to be clearly specified as it is important to remember that other organisations (eg. banks when considering a Property and Affairs LPA) will need to understand the instructions.

replacement Attorney

It is possible to name a replacement(s) in case an Attorney is unable to, or no longer wishes to, continue acting for you. This needs to be specified clearly within the LPA.

certification

Under an EPA it was only necessary for a Donor to have their signature witnessed. Under an LPA not only must the Donor have their signature witnessed but an independent person must complete a certificate at Part B of the form.

The certificate confirms three things:

• That the Donor understands the purpose of the LPA and the scope of the authority under it;
• That no fraud or undue pressure is being used to induce the Donor to create the LPA; and
• There is nothing else that prevents the LPA being created.

The Certificate Provider must be chosen by the Donor and be over the age of eighteen years. The provider must be acting independently of the Donor and the proposed Attorney(s). There are two types of Certificate Provider:

• Knowledge Certification - a knowledge-based Certificate Provider is someone that you know personally and has known you for at least two years.

• Skills Certification - a skills based Certificate Provider is someone who considers that they have the relevant professional skills and expertise to certify your LPA. The following are suitable skills-based Certificate Providers listed in the LPA form:

• A Registered Healthcare Professional (including GP);
• A Solicitor, Barrister or Advocate;
• A Registered Social Worker; or
• An Independent Mental Capacity Advocate

We would recommend that you should use a skills-based Certificate Provider as if at the stage of registration any objection is raised then the Certificate Provider may be required to explain why he considered the Donor had the capacity to create the LPA and was not acting under pressure.

registration

An LPA has to be registered with the OPG before it can be used. It can be registered any time after you have made it and cannot be used until it has been registered.

As it is considered that the registration process could take in the region of eight weeks we would recommend that consideration is given as to the merits of registering the LPA shortly after it is made. That way it will be ready for use by your Attorney(s) when it is needed.

The registration fee payable to the OPG is £150 per LPA.

notifying other people before registration

It is possible within the LPA to name up to five people to be notified when an application to register your LPA is made. It is a requirement that anyone about to apply for registration of an LPA must notify these people. This is an important safeguard because if you lack capacity at the time of registration you will be relying on these people to raise any concerns that they may have about the application to register.

If you choose not to name anyone to be notified you will need to have two Certificate Providers under Part B of the LPA.

do you need to see a Solicitor to make an LPA?

You do not have to seek legal advice - it is your choice. We do consider, however, that an LPA is a powerful and important document and it is far more complex than the previous EPA system. We would recommend that anyone considering completing a LPA should seek appropriate professional advice.

is any further information available?

Further information may be obtained from the Office of the Public Guardian - www.publicguardian.gov.uk