Fiona Higgott, Partner in the Wills, Estate & Tax Planning team at Thomson Snell & Passmore answers questions about Lasting Powers of Attorney for the Times of Tunbridge Wells.
What are the different types of Lasting Power of Attorney?
Lasting Powers of Attorney (LPAs) come in two varieties – one deals with property and financial issues and the other deals with medical and care issues (and is known as a health and welfare LPA).
Under a property and financial affairs LPA, your attorneys can make decisions on your behalf such as buying and selling property, opening and closing bank accounts, dealing with your investments, managing your day to day finances, and claiming benefits and pensions. This type of LPA can be used at any time, even if you still have capacity. In those circumstances, however, it would be used by your attorneys at your direction.
A health and welfare LPA can only be used if you have lost capacity to make health and welfare related decisions. It enables your attorneys to make decisions about where you should live, the type of care you receive and day-to-matters such as your daily routine, diet, visitors and the social activities which you participate in.
You can create both types of LPA or just one type and not the other. Ensuring an LPA is in place will mean that decisions can be made quickly and by someone you trust if you ever lose capacity.
You need to appoint at least one attorney and up to a maximum of four. If you choose more than one, you will need to decide whether you want your attorneys always to act together (a joint appointment) or whether they can also act separately (a joint and several appointment). A joint several appointment is the most flexible option. You can also choose to appoint a replacement attorney or attorneys if your first choice is unable to act for any reason.
You can apply conditions and restrictions on the use of the LPA and can also include guidance as to how you would expect your attorney to act.
How does someone go about creating LPAs?
LPAs can be created either by going to see a solicitor or by using the Office of the Public Guardian (OPG) website. Whilst the OPG website avoids paying any legal fees, it simply allows the forms to be drafted and does not provide detailed guidance, such as how best to appoint attorneys in your specific circumstances, and it does not in any way check the forms to make sure that they are capable of being registered or to make sure that there are no problems that might arise in the future. For this reason, it is usually better to speak to a solicitor.
What are the key responsibilities and duties of an individual who has been appointed under an LPA?
Where someone is appointed as an attorney, they must always act in the best interests of the donor. In particular, this means keeping the donor's money separate from their own, making sure that they keep appropriate records and accounts relating to the steps or actions that they take, and complying with the Code of Conduct introduced by the Mental Capacity Act. Attorneys also have to be careful not to overstep their authority as there are certain things which attorneys cannot do. For example, if an attorney wants to make a lifetime gift out of the donor's assets, borrow money from the donor, or act in a way in which a conflict of interest might arise (amongst other things), the attorney may well need to apply to the Court of Protection to obtain permission first.
This article first appeared in The Times of Tunbridge Wells.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
