What is a Power of Attorney?

A Power of Attorney is a legally binding document which enables you (‘the donor’) to choose one or more people (the attorneys) to make decisions and manage your affairs during your lifetime if you are no longer able to, or no longer want to, do so.

Types of Power of Attorney

There are 3 different types of Powers of Attorney:

1. Lasting Power of Attorney
2. Enduring Power of Attorney
3. General/Original Power of Attorney

Lasting Power of Attorney (LPA)

A Lasting Power of Attorney (LPA) enables you to choose one or more people to make decisions and manage your affairs during your lifetime if you become unable to manage your own affairs due to incapacity. There are two separate types of LPAs. One relates to your property and financial affairs and the other relates to your personal welfare.

If you do not make an LPA and you lose mental capacity, the Court of Protection can appoint a deputy to manage your affairs but you will not be able to choose who that person is. The procedure can also be costly and take a considerable length of time.

LPA for Financial Decisions

Your attorney(s) will be able to make decisions on your behalf and unless restricted within the document, will be able to undertake any financial transaction which you yourself could have done, including for example, operating your bank accounts, claiming benefits on your behalf, dealing with your tax affairs and selling your house or other assets.

Your attorney(s) can act for you, with your agreement, whilst you are still mentally capable of managing your affairs which can be useful if you are physically incapacitated or abroad for an extended period. They will also be able to make decisions and act for you if you lose mental capacity in the future.

If you own a lot of property or a business in which you are a sole trader, it is advisable to consider making separate LPAs for your own personal affairs and also for your business affairs.

If you do not have an LPA in place, the Court of Protection will appoint a deputy to carry out your wishes, however they may not know of or may not agree with your friends and family views. This could lead to conflict between parties.

If you do not make an LPA and you lose mental capacity, the Court of Protection can appoint a deputy to manage your affairs but you will not be able to choose who that person is. The procedure can also be costly and take a considerable length of time.

LPA for Health and Welfare Decisions

Your attorney(s) will only be able to make decisions about your personal welfare if you lack the mental capacity to make the decision in question. Such decisions could include your living arrangements and care, your diet and the type of activities you take part in and also consenting to or refusing medical treatment including life sustaining treatment.

Your attorney(s) will only be able to make decisions on your behalf if you have lost capacity to make decisions for yourself.

Enduring Power of Attorney (EPA)

EPAs can no longer be created in England & Wales, although any EPAs created and signed before 1st October 2007 are still valid but must be registered, if the donor loses mental capacity.

However, if you made an Enduring Power of Attorney (EPA) prior to 1st October 2007, it only enables your attorney(s) to deal with your financial affairs. Your attorney(s) will not have authority to make decisions relating to your health and welfare. If you would like to appoint an attorney to manage decisions about your health and welfare, please contact one of our Private Client team for advice and assistance.

General Power of Attorney

A General Power of Attorney allows others to make financial decisions on your behalf whilst you have mental capacity. Many people grant such powers so their finances can be handled appropriately either whilst they are in hospital, on holiday or whilst they are waiting for an LPA to be set up. This is often done when they are unable to attend banks or other similar institutions themselves.

You can limit the amount of power you give to an attorney, allowing them only to deal with the assets that you choose, with restrictions on how they handle your affairs.

Our Power of Attorney Solicitors can assist with:

1. Advice on capacity issues
2. Advice on the appointment of attorneys and their duties
3. Preparing the LPA forms
4. Registration of LPAs and EPAs with the Office of the Public Guardian (OPG)
5. Financial administration in connection with LPAs
6. Revoking (cancelling) an LPA or EPA
7. Disclaiming (retiring) from the position of attorney

What is the difference between a lasting power of attorney and an enduring power of attorney?

On 1st October 2007, LPA’s replaced EPA’s and they are no longer made. However, if you have an EPA signed prior to that date, it will still be valid and can be registered if and when necessary.

When should you set up a Lasting Power of Attorney?

You may wish to create an LPA for a number of reasons. In the unfortunate event of having a stroke or other serious illness or a serious accident, an LPA can act as safeguard to protect your assets when you do not have the capability to deal with matters. An extraordinary amount of people in the UK have developed dementia and the reason for this is unknown, therefore the number of people creating LPA’s in recent years has been on the increase.

We often do not know/cannot tell when someone is going to lose capacity, therefore it is recommended you take precautions for you and your family’s future. Having an LPA prepared for any event is important.

How to set up a Power of Attorney/Step-by-step guide to Power of Attorney

1. The first step to setting up your LPA should be choosing a well-regarded, suitable solicitor to talk you through the complex legal documents and process.
2. Your solicitor will discuss with you which Power of Attorney is most appropriate for your circumstances.
3. As the donor, you will need to choose who you would like to appoint as your attorney(s). These are the people who will act for you and make decisions when you are unable to do so. If the donor appoints more than one attorney, they may be appointed to act, jointly, jointly and severally, jointly in respect of some matters and jointly and severally in respect of others. Replacement attorneys can also be appointed. The donor is able to govern the attorney’s actions and restrictions can be put in place to instruct the attorney’s on what they can decide for you.
4. An LPA must include a certificate that is given by someone who has known the donor personally for at least two years, for example, someone who has the necessary professional expertise and skill, for example, a solicitor or GP or a friend or neighbour. The certificate states that they will be able to clarify that you have full mental capacity before the LPA is activated. This is very important because you will not be able to create a LPA without mental capacity.
5. The next step will be submitting the LPA forms to the Office of the Public Guardian (‘OPG’) along with payment of the registration fee. Your solicitors will be able to deal with all aspects of the registration process on your behalf.
6. The registration for Power of Attorney’s can take from 8-10 weeks. During this time, your ‘people to notify’ LP3 forms should be sent out – this informs those you have chosen of your intention to register a Power of Attorney. Anyone who you have identified has 3 weeks to raise concerns to the OPG if they feel the LPA is circumstantially incorrect.
7. The LPA will then be returned to you (the donor) or your solicitor. If it is specified otherwise in the terms of your LPA, it is activated straight away.
8. Unless your solicitor is your attorney, it is recommended you keep your LPA with your lead attorney in the event of you loosing mental capacity.

Choosing A Solicitor to act on your behalf

Our Private Client team can advise and arrange on all types of Power of Attorney and are also available to act as professional attorneys, should you require.

Acquiring signatures from Certificate Providers

A Certificate Provider is there to ensure that you are fully aware of the LPA process and that you are not signing documentation against your will.

You may choose someone who is over the age of 18 to be your Certificate Provider. You must have known them for more than two years or they must be a recognised professional, such as doctor or lawyer.

Submit Power of Attorney forms to OPG

When submitting a LPA to the OPG, it is crucial that the document is legally correct and contains no errors. Legally binding documents can be complex and misleading, so using a solicitor to make sure all the information you are submitting is error free is strongly recommended.

Notify ‘people to be told’

The registration for LPA can take the OPG 8-10 weeks to process. During this time, notification to your chosen parties, if any, is submitted to confirm you are planning to register your LPA.

Those identified have 3 weeks to raise concerns to the Office of the Public Guardian if they feel the LPA is circumstantially incorrect.

Registering a Power of Attorney

When submitting a Power of Attorney to the OPG, it is crucial that the document is legally correct and contains no errors. Our solicitors will provide you with the documentation and guidance necessary for registration. Costs for registration will vary, but we will try to take the most cost effective route for you.

Authority to act as an Attorney

You should always have at least one attorney to deal with your affairs if you are unable to do so. But who should you choose?

You should consider the following when appointing your attorneys:

• Are they trustworthy and able to act in your best interests?
• Do they know you well enough to know what you might want from a situation?
• Will their decisions be the right decisions for you?
• Can they make impartial choices, without considering their own needs?
• Are they able to look after their own affairs well, such as financially?

How do I make changes to my Power of Attorney?

After an LPA has been sent to the OPG you will not be able to make any amendments. A solicitor should help you to make sure the document is completely correct before submitting.

Very minor spelling mistakes are usually disregarded, however larger errors will mean that the LPA needs to be redrafted and resubmitted, costing more time and money.

Attorney’s duty of care

Attorneys must always act in the best interests of the donor. If it is felt that an attorney has acted incorrectly on behalf of the donor, a complaint could be filed under the Mental Capacity Act 2005 Codes of Practice with the Office of the Public Guardian who will then investigate and if necessary take steps to have the attorney removed.

Cancel your Power of Attorney

As long as you have the mental capacity to do so, a LPA can be cancelled at any time. If it has already been registered you will need a Deed of Revocation which revokes the original agreement.

The Deed of Revocation must be signed, dated and witnessed as the original LPA had been, then sent to the OPG. All attorneys should be made aware that you are terminating the document.

When to Contact the Office of the Public Guardian?

You or your solicitor will contact the OPG to request documentation which should be filled out and returned to them for registration.

Once registration is completed, you will only need to contact the OPG to revoke your Power of Attorney or to have it replaced.

What happens if you lose capacity without having a Lasting Power of Attorney?

If you lose capacity and have not made an LPA, somebody will need to act on your behalf. The Court of Protection will appoint a Deputy; who is usually a friend or relative and they will make decisions as to your finances, property, health and welfare. However, in some circumstances it is more appropriate to have a professional to act as your Deputy, such as a solicitor and the Court will often select a professional deputy in cases where is family conflict.

This process can be lengthy, time consuming and expensive so it is best to have an LPA in place for this occurrence.

The Court of Protection and Deputyship

When a person lacks the capacity to deal with their property and financial affairs and/or their health and welfare and they have not made an Enduring Power of Attorney (EPA) or a Lasting Power of Attorney (LPA), the Court of Protection may appoint a Deputy to act for them.

Jennifer Murphy, Head of Private Client Department is on the Panel of Deputies, one of only 71 in the Country.

What is Mental Capacity?

Having mental capacity means you are able to make your own decisions in day-to-day life. Someone who does not have mental capacity, for any reason such as an illness or disability, is unable to make sound decisions on a temporary or permanent basis.

Someone who lacks mental capacity is unable to:

• Understand information or retain it long enough to make a decision.
• Communicate the decision.
• Evaluate or ‘weigh up’ the information to make a decision.

Our Power of Attorney services include:

Attending upon the Donor (person appointing Attorneys) to take initial instructions and to provide all relevant advice.

• Drawing up and submitting draft documentation for approval. Preparing documentation for signature and attending you thereon to sign the same.
• Correspondence and telephone attendances upon you.
• Correspondence upon your Certificate Provider and Attorneys to arrange for their signature to the documentation.
• Lodging documents with Office of Public Guardian for registration.
• Upon receipt of registered Lasting Power of Attorney providing you with a copy.

Upon completion we recommend the original document is stored in our archives for safe keeping on your behalf at no additional cost to you.

FAQ’s

Our service includes attending upon the Donor (person appointing Attorneys) to take initial instructions and to provide all relevant advice.  Drawing and submitting draft documentation for approval.  Preparing documentation for signature and attending you thereon to sign the same.  Correspondence and telephone attendances upon you.  Correspondence upon your Certificate Provider and Attorneys to arrange for their signature to the documentation.   Lodging documents with Office of Public Guardian for registration.  Upon receipt of registered Lasting Power of Attorney providing you with a copy.

Upon completion we recommend the original document is stored in our archives for safe keeping on your behalf at no additional cost to you.

Lasting Power of Attorney

Standard documents and those whereby up to a maximum of 2 Attorneys are appointed will be at the lower end of the price scale whereas those appointing additional Attorneys and/or incorporating complex additional instructions and powers will be at the higher end of the price scale.  You will be advised at initial meeting of exact cost.

Examples:

• a single person decides to execute a Lasting Power of Attorney, for Property and Financial Decisions and a Lasting Power of Attorney, for Health and Welfare decisions appointing two individuals as Attorneys with no specialised instructions – cost will be £950.00 plus VAT £190.00 plus x 2 Court fees £164.00 = £1,304.00
• a couple decide to each execute a Lasting Power of Attorney, for Property and Financial Decisions appointing two attorneys and no specialised instructions – cost will be £950.00 plus VAT £190.00 plus 2 x Court fees £164.00 – £1,304.00
• a couple decide to each execute a Lasting Power of Attorney, for Property and Financial Decisions in favour of 4 Attorneys with 2 named replacement Attorneys and incorporating complex financial instructions to Attorneys – cost will be £1,300.00 plus VAT £260.00 plus 2 x Court fees £164.00 = £1,724.00
• a couple decide to each execute a Lasting Power of Attorney, for Property and Financial Affairs and a Lasting Power of Attorney, for Health and Welfare decisions in favour of 2 Attorneys, with specialised provisions – cost will be £1,900 plus VAT £380.00 plus 4 x Court fees £328.00 = £2,608.00

Please note you will be asked to make a payment on account of 50% of the overall cost estimate when attending for initial meeting or if giving instructions by correspondence prior to any work being undertaken.

Please note the cost information given here is general and you will be given more precise and personalised information at your initial meeting.

We reserve the right to charge additional fees, on a time spent basis, if documentation needs to be redone because of signature errors or loss of documentation by Certificate Providers or Attorneys.