Many people become incapable of managing their affairs during their lifetime. Given the UK’s aging population, this is most commonly due to old age and related conditions, but it can also occur due to an accident or stroke. It can prove invaluable to plan for this eventuality and such plans help to give individuals reassurance that trusted person(s) will be able to step in when needed.
A Lasting Power of Attorney ("LPA") is a legal document that allows an individual (a “donor”) to give someone (an "attorney") the power to act on their behalf if they were to lose mental capacity. There are two types of LPA: one that deals with property and finances and the other personal health and welfare decisions. LPAs replaced the previously used form of Enduring Powers of Attorneys ("EPAs"), which were limited to decisions in relation to property and financial affairs. However, any EPA that was correctly executed before 1 October 2007 continues to be valid.
LPAs must be registered with the Office of the Public Guardian before they can be used. These legal documents avoid the necessity for an application to the Court of Protection to appoint a "deputy" to make decisions on behalf of someone who has lost mental capacity. The process for appointing a deputy can be time consuming and expensive at a time when urgent action may be required.
In order to create a valid LPA, a prescribed form must be completed and there are separate forms for each type of LPA. The form contains a certificate, which needs to be completed by an independent person, who has either known the donor for two years or who is a relevant professional. The certificate provider signs the LPA to confirm that there is no indication of undue pressure being put on the donor to make the LPA and that the donor understands the purpose of the LPA and the scope of authority given under it.
The LPA for property and finance can operate before or after mental capacity is lost. It can allow an attorney to deal with a person's bank accounts and bills, buy or sell property on their behalf and deal with their tax affairs. The donor creating the LPA can limit the scope of the attorney's authority by expressly specifying restrictions in the LPA. However these should be carefully thought through (and ideally advised on by a lawyer) as the Office of the Public Guardian could reject or alter invalid preferences or instructions.
LPAs for health and welfare may concern decisions relating to a person's day-to-day care, where they live and consenting to medical care. Significantly, a donor can give instructions to their attorney in relation to accepting or refusing life-sustaining treatment. Unlike the LPA for property and finance, a health and welfare LPA can only be used by an attorney once the donor has lost mental capacity. Generally, deputies are not appointed by the Court of Protection to make health and welfare decisions, with any major medical decisions being made by medical professionals (if the patient is unable to do so and there is no attorney).
Due to the significant authority that may be given to an attorney under an LPA, it is important to choose someone trustworthy. An attorney must be an adult that is mentally capable; they may be a spouse, relative, friend or professional adviser. A donor can appoint more than one attorney, in which case the donor would need to decide whether they are to act jointly or jointly and severally. A replacement attorney can also be appointed in case an attorney dies or is unable to act.
The credibility of the LPA procedure has been brought into question by the comments made by Denzil Lush (a retired senior judge from the Court of Protection). In an interview last August, Lush insisted that he would never personally put in place a financial and property affairs LPA and highlighted the insufficiency of the safeguards in the LPA creation process, meaning that attorneys are able to abuse their positions. Instead he would prefer to have a deputy appointed by the Court of Protection on the basis that deputies are more routinely accountable for their actions.
Lush’s comments remind us of the importance of selecting the right person or persons to be an attorney, as they have a vital role in caring for donors when they are at their most vulnerable. The involvement of solicitors in the process of creating and registering LPAs can assist donors in picking appropriate combinations of attorneys and help ensure that attorneys understand their duties to act in the best interests of the donor, in accordance with the Mental Capacity Act 2005. Donors should also seek advice on the best way (in their particular circumstances) to utilise the safeguards that are currently available in the LPA registration process. For instance, lawyers can advise on appointing independent attorneys and on including preferences/instructions to their attorneys on the donor’s care, the management of their bank accounts and the family home.
Although it cannot be denied that the LPA process has its weaknesses that can be taken advantage of by those seeking to abuse the system, given the current options available, LPAs still play an important role in enabling donors to make clear their wishes and to carefully select their attorneys.