Lasting Power of Attorney

Why is Lasting power of attorney (LPA) important?

The Covid pandemic has only served to illustrate how important it is to be able to deal with a relative`s finances and affairs should they become suddenly incapacitated through illness, physical injury or hospitalisation. Many would have unfortunately realised too late that in many cases, unless you have legal authority to act on their behalf before such an event, such as being appointed as their attorney you will not be able to deal with everyday matters such as paying their bills or accessing their money on their behalf resulting in extra stress and upset at such a difficult time.

Such situations can easily be avoided by simply preparing a lasting power of attorney or LPA in advance and appointing those who you know and trust to deal with such matters during this period.

What is lasting power of attorney?

A lasting power of attorney is a legal document that gives others power to make decisions on your behalf in terms of property, healthcare treatment and financial affairs. There are two types; “health and welfare” and “property and financial affairs”.

The health and welfare LPA allows decisions to be made about the choice of medical treatment and care and even where you might wish to be cared for when you return home. Without such protection it may not be your relatives that make these important decisions and there has been a recent well publicised case where a lady was taken from the care of a relative and placed in a care home which could have been avoided if there had been a lasting and health care power of of attorney in place.

Setting up a lasting power of attorney

Establishing a lasting power of attorney (LPA) is a proactive measure to ensure your property and financial affairs, as well as health and welfare decisions, are in trusted hands should you lose mental capacity. This legal document grants a family member, friend, or professional attorney the legal authority to act on your behalf, not just for a temporary period, but continuing even if you are no longer able to make your own decisions due to mental incapacity.

It’s a safeguard, distinguishing ordinary power itself from ordinary powers that might lapse if the donor becomes mentally incapacitated.

Creating an LPA involves choosing someone you trust to manage your property and financial affairs and, if you wish, make decisions about your personal welfare, including medical treatment. The process is meticulous, requiring you to act jointly with your chosen attorney(s) to ensure your best interests are always the forefront of any decisions made.

This may involve managing bank and building society accounts, paying bills, or even making significant health care decisions, such as continuing life support in certain circumstances.

The Mental Capacity Act underpins the importance of preparing for a time when you might lack the mental capacity to manage your affairs, advocating for the appointment of more than one attorney to act severally or jointly in your lack mental capacity in managing your financial or health and care decisions.

It’s crucial to register your LPA with the Office of the Public Guardian to make it a valid, enduring power, ensuring your attorney(s) can legally make decisions when you’re unable to. For those navigating this process, seeking advice from local citizens advice or consulting legal professionals can provide clarity and assistance in completing the attorney forms accurately, ensuring your wishes are respected and your future is secure.

Responsibilities of an attorney

When someone is appointed as an attorney under an LPA, they assume critical responsibilities. These responsibilities ensure the donor’s wishes and best interests are always central to any decisions made, whether they pertain to financial affairs or health and care decisions. Understanding the scope of these duties and limitations is essential for anyone undertaking this role.

The financial side involves managing the donor’s assets, bills, and investments with prudence and transparency, ensuring that their financial health is maintained or enhanced. On the other hand, decisions about health and care must consider the donor’s personal well-being, medical treatment, and living arrangements, aiming to uphold their dignity and quality of life.

Understanding the breadth of these obligations, along with the legal and ethical boundaries that frame them, is crucial for anyone accepting the role of an attorney. It requires a comprehensive grasp of the laws governing LPAs, a deep respect for the donor’s autonomy and preferences, and an unwavering commitment to act with integrity and in good faith.

This role necessitates not just a willingness to take on these duties but also a readiness to consult with professionals, seek advice when necessary, and, above all, communicate openly and honestly with the donor, as far as possible, and with other family members those who care for them.

In essence, being appointed as an attorney under an LPA is a role of great trust and responsibility. It demands a thoughtful understanding of the donor’s needs and desires, a vigilant eye on the boundaries of one’s authority, and a heart fully committed to serving the donor’s best interests at all times. It is a role that, when executed with dedication and care, can make a significant positive impact on the life of the donor, providing them with the assurance that their affairs, both financial and personal, are in capable and trustworthy hands.

Duties and limitations

An attorney must act with the highest level of care and in good faith, adhering strictly to the guidelines set out in the Mental Capacity Act and the specific terms of the LPA. This means always considering the best interests of the donor, avoiding any conflicts of interest, and not benefiting personally from their position beyond reimbursement for reasonable out-of-pocket expenses.

Attorneys are also expected to keep accurate accounts of their dealings, separate from their own, ensuring transparency and accountability in their role.

Financial decisions

When it comes to financial decisions, an attorney’s responsibilities can range from everyday tasks like paying bills and managing bank accounts, to more significant duties such as selling property or managing investments.

The key is that any decision must aim to maintain or enhance the donor’s financial affairs, ensuring their assets are protected and utilised in a manner that benefits them. Attorneys are granted access to financial information and assets solely for this purpose and must not mix the donor’s money with their own or use the donor’s assets for anyone’s benefit but the donor or someone’s personal welfare.

Health and care decisions

For health and care decisions, an attorney’s role is to make choices that reflect the donor’s preferences and values, particularly regarding their medical care, living arrangements, and daily routine.

This could include decisions on medical treatment, end-of-life care, and even smaller, day-to-day choices about the donor’s personal welfare. Health and care decisions must be made with a focus on supporting the donor’s well-being and dignity, always prioritising their comfort and quality of life, not others.

Challenges and considerations

Navigating the role of an attorney in fact or under a lasting power of attorney comes with its unique set of challenges and considerations. These include understanding precisely when an attorney can make decisions, knowing the process for revoking or cancelling an LPA, and handling disputes that may arise.

Moreover, attorneys must be adept at navigating the complexities of acting in the best interests of the person who has granted them this significant power. This includes making decisions that align with the donor’s previously expressed wishes, where possible, and ensuring those decisions reflect considerations of the donor’s current well-being and future needs.

Furthermore, it is essential for attorneys to understand the importance of maintaining clear, open lines of communication with all relevant stakeholders, including family members and healthcare professionals, to uphold a transparent and accountable decision-making process.

These elements are pivotal not only in safeguarding the rights and autonomy of the individual who has made the LPA but also in fostering trust and confidence in the attorney’s ability to act judiciously and compassionately.

Thus, an attorney must approach their duties with a deep sense of responsibility, empathy, and integrity, ensuring that every decision made under the LPA respects and protects the wishes and best interests of the donor.

When an attorney can make decisions

One of the primary challenges is determining when an attorney is authorised to start making decisions on behalf of the donor, especially when it comes to property and financial affairs. This authority is contingent on the attorney power LPA being registered with the Office of the Public Guardian. For a property and financial affairs LPA, the attorney can begin making decisions as soon as the LPA is registered, with the donor’s consent.

However, a health and welfare LPA only comes into effect when the donor has lost mental capacity. Determining loss of mental capacity requires careful consideration and, in some cases, the opinion of a medical professional to ensure that the donor’s rights are not prematurely overridden.

Revoking or cancelling a lasting power of attorney

Another significant consideration is the process for revoking or cancelling an LPA. The donor can revoke an LPA as long as they still have mental capacity. This process involves formally notifying the Office of the Public Guardian and all appointed attorneys about the revocation.

However, if the donor has lost mental capacity, an LPA can only be cancelled by the Court of Protection. It’s important for both donors and attorneys to understand the conditions under which an LPA can be revoked or cancelled to ensure that the legal document remains a true reflection of the donor’s wishes.

Disputes and how to resolve them

Disputes may arise regarding the actions or decisions of an attorney, or between multiple attorneys appointed to act jointly or severally. These disputes can be challenging, affecting not only the parties involved but also the well-being of the donor.

Resolving disputes may require mediation to reach an amicable agreement that respects the donor’s best interests. In cases where mediation is unsuccessful, it may be necessary for professional attorneys to involve the Court of Protection to make a ruling on the dispute. Attorneys must always act in the best interests of the donor, and disputes should be handled with sensitivity, always aiming to uphold the intentions behind the LPA.

Costs involved in setting up an LPA

Setting up an LPA in the UK involves certain costs that need to be considered. These can include the legal fees for drafting the LPA documents, which can vary depending on whether you seek assistance from a solicitor or a specialist advisor. Additionally, there is a mandatory registration fee for each LPA with the Office of the Public Guardian, which is essential for the LPA to be recognised legally.

It’s possible to apply for a reduction or exemption of this fee for those on low incomes or certain benefits. While the initial outlay may seem substantial, the peace of mind and security it provides for managing one’s affairs in the future can be invaluable. It’s also worth noting that these costs are a one-time investment in your future well-being and financial security.

Managing money and property

An attorney appointed under a property and financial affairs LPA has the authority to make a wide range of decisions on behalf of the donor, from day-to-day banking transactions to selling property. The primary aim is to ensure the donor’s money and property are managed wisely, maintaining or enhancing their value for the benefit of the donor.

Attorneys must keep the donor’s finances separate from their own, maintaining meticulous records of all transactions and decisions made. This responsibility may also extend to investing the donor’s money, ensuring taxes are paid, and managing any rental property, always acting within the legal and best interest framework set out by the LPA.

Dealing with banks and pensions

Dealing with banks and managing pension arrangements are key aspects of managing someone’s financial affairs under an LPA. Banks and financial institutions require specific documentation to recognise an attorney’s authority to act on behalf of the donor. This often includes a certified copy of the LPA and proof of identity for both the donor and the attorney.

Attorneys must navigate the institution’s policies and procedures, which can vary significantly, to gain access to accounts or make decisions related to the donor’s pensions. Understanding these processes is crucial for ensuring the donor’s financial stability and that their income and savings continue to support their needs effectively.

Attorneys should also be aware of the need to liaise with pension providers to make decisions about pension drawdown or changes to pension investments, always with the donor’s best interests at heart.

Peace of mind for you and your family

None of us wish to dwell on what will happen when we get older or if we suffer an accident, illness or lose mental capacity. Hopefully none of the above will happen but once we have lost mental capacity it is too late to prepare a Lasting Powers of Attorney which is why it is vital that we consider such scenarios when we are fit and well so we have peace of mind. That way, should such an unfortunate event occur in our lifetime, those we hold nearest and dearest to us will be able to deal with our affairs. Not only that, but they will be able to care for us in complete accordance with our wishes.

Contact us for lasting power of attorney guidance in Cardiff

If you don’t know where to start, we can guide you through the process of preparing a lasting power of attorney, provide expert advice and peace of mind so that you know your requirements are safeguarded for the future. With offices in Cardiff, Bridgend, and Pontyclun, why not contact us today to get the ball rolling.