A lasting power of attorney (LPA) is an important legal document which allows you, as the “donor”, to give significant powers over your affairs to other people known as “attorneys” during your lifetime.
There are two different types of LPA available: a property and financial affairs LPA (PF LPA) and a health and welfare LPA (HW LPA). The former permits an attorney to deal with financial decisions (eg to pay bills and sell property) while the latter allows an attorney to make decisions relating to healthcare and medical treatment. Both documents are only effective once registered with the Office of the Public Guardian (OPG), which is the government office responsible for LPAs. Following registration, the PF LPA can be used either before or after mental capacity is lost (the donor will make this decision in the PF LPA). The HW LPA, however, is only effective once the donor has lost capacity.
Given the importance of an LPA, it is of concern that the OPG has recently announced in its updated LPA literature that legal advice is not always needed to create these documents. Such advice reflects its view that updated online forms have streamlined the processes for creating an LPA. The proposal is that it is easier and more efficient for an individual to produce an LPA on their own without legal assistance.
The OPG claims that the LPA forms are in plain English. However, each one is over 20 pages long and the individual questions need careful consideration. In addition, the OPG recommends that several lengthy supporting documents should be reviewed by the donor and the potential attorney(s) to explain the legal issues connected with an LPA. Given this complexity, it is still important to consider taking legal advice prior to creating an LPA. This ensures the donor will have an opportunity to discuss and be advised on key legal issues connected with an LPA which include:
- capacity requirements: an LPA is only valid if the donor has the mental capacity to make the LPA at the time it was created. A certificate provider is responsible for checking that the donor has the mental capacity to execute the LPA. A solicitor can act as an independent certificate provider with the expertise to check the forms and confirm capacity before execution;
- checking for undue influence: when a solicitor is preparing an LPA, he or she acts as an independent party and should check that the donor is acting of their own free will. This is an important safeguard for vulnerable individuals who could be pressurised into making an LPA against their wishes. Many donors may also not be able to complete the forms online without assistance. Legal advice can ensure a donor makes informed decisions which are then properly recorded in the LPA form;
- appointment of attorneys: there are legal restrictions on who can be appointed as an attorney, how many can be appointed and who can act as a replacement when needed. This is not a straightforward appointment and a mistake can mean a chosen attorney is unable to act at a later date. Legal advice can provide important guidance on this issue;
- inserting preferences or instructions into the LPA: these are optional and can provide guidance (preferences) or limit actions (instructions) on an attorney’s powers. The donor can, for example, ask the attorney to speak to a specified individual before making a decision about their care or financial affairs. Failure to complete these correctly can result in the striking out of a particular request at registration;
- advice on specific decisions: creating an LPA requires a donor to make critical legal decisions - can an attorney, for example, have the power to give or refuse life sustaining treatment on their behalf (HW LPA); should an attorney only have powers over financial affairs once mental capacity is lost (PF LPA). Legal advice can help the attorney to reach a balanced, informed decision on these and other important issues connected with an LPA;
- validity of an LPA when giving instructions to third parties: restrictions exist on how certain roles can be delegated to an attorney and so particular guidance should be sought if the donor of the power is a trustee or appoints other parties using a nominee agreement eg investment advisor;
- execution of an LPA: the OPG may refuse to register an LPA which has not been signed in the correct order. New LPA forms might need to be prepared, which is a timely and costly mistake;
- registration of an LPA: failure to understand the importance of timely registration can have significant consequences. Without a properly registered LPA, a court deputy may need to be appointed to manage the affairs of an individual who lacks mental capacity. This can be a costly process and the individual appointed often has no personal connection with the donor.
The drafting and production of an LPA is not, therefore, another online process to undertake blithely. The donor is not simply completing a form online to renew their passport or driving licence; the processes and decisions required are far more complex and detailed. It is an important document and having a legal expert who is independent of the family provides an additional safeguard to the risk of documents being prepared incorrectly, with undue pressure, or even fraudulently.
It is therefore vital to ensure that you fully understand how to complete an LPA and appreciate all the implications of this legal document.