Lasting Powers of Attorney
What happens if I cannot look after my own affairs due to mental incapacity?
It is illegal for anyone to handle the financial affairs of another without legal permission. In order to grant that permission you would need to sign a Lasting Power of attorney which gives that permission to an Attorney or Attorneys you appoint who may then look after your financial affairs on your behalf.
What is a Lasting Enduring Power of Attorney?
There are two types of Lasting Power of attorney – Property & Affairs and Personal Welfare. Each Lasting Power of attorney is a separate document.
A Property & Affairs Lasting Power of attorney is a legal document that enables you (the "Donor") to appoint one or more persons ( the Attorneys)to manage your financial affairs and property either now or in the future. The document will continue to be valid should you become mentally incapable The Lasting Power of attorney is signed by the you, a certificate provider and all the appointed Attorneys.
The Personal Welfare Lasting Power of attorney works in a similar way to the Property and Affairs Lasting Power of attorney, but it allows Attorneys to make welfare and medical decisions on behalf of the Donor (including, if specified, life sustaining decisions) rather than financial decisions once the Donor has lost the mental capacity to make his own decisions.
Lasting Powers of attorney must be registered with the Office of the Public Guardian (either by the Donor or by an Attorney) before they can be used. Once registered the Property and Affairs Lasting Power of attorney can be used immediately whether the Donor has lost mental capacity or not (if the Donor wants this) but the Personal Welfare LPA can only be used if the Donor has lost mental capacity to make decisions on the medical conditions he has specified in his Lasting Power of attorney or on his general welfare.
Who can make a Lasting Power of attorney?
Anyone over the age of 18, as long as they are mentally capable of understanding the meaning and effects of a Lasting Power of attorney.
A certificate provider is required to certify this and also that he does not believe the Lasting Power of attorney is being made fraudulently or under duress. The certificate provider can be someone who has known the Donor well for at least 2 years, someone from a recognised profession or someone who has the professional skills and expertise to be able to give the certificate such as a Moneta Partnership consultant.
What Powers does an appointed Attorney have?
The powers are set out in the Lasting Power of attorney document. The widest powers in a Property and Affairs LPA allow the Attorney to act in all financial matters including selling property (although selling property can be specifically excluded).
A Property and Affairs Lasting Power of attorney can be written so that it only comes into effect should you become mentally incapable.
The Lasting Power of attorney can be written so that all the appointed Attorneys have to act together (known as "jointly") or they can act separately (known as "jointly and severally"). If Attorneys can only act "jointly" then if one of them dies, becomes mentally incapable or refuses to act (or becomes bankrupt, in the case of a Property and Affairs Lasting Power of attorney) the Lasting Power of attorney fails. If Attorneys can act "jointly and severally" then if one of them dies, becomes mentally incapable or refuses to act (or bankrupt, in the case of a Property and Affairs LPA) the other Attorneys can continue.
An Attorney cannot act solely in the sale and purchase of a property if the Donor and Attorney are co-owners.
Who can be an Attorney?
Anyone over the age of 18 and, in the case of a Property and Affairs Lasting Power of attorney, is not bankrupt. Attorneys have a legal duty to act in the best interests of the Donor and to comply with the Code of Practice under the Mental Capacity Act 2005.
How is an LPA used while I am mentally Capable?
The Donor should retain the document in his/her possession (possibly keeping it with their Will). Only a Property and Affairs Lasting Power of attorney can be used while the Donor still has mental capacity (if it says so).
What happens if my Lasting Power of attorney is needed?
The Lasting Power of attorney must be registered with the Office of the Public Guardian before it can be used. An Lasting Power of attorney can be registered at any time after it has been signed and completed, by the Donor and the Attorneys If it has not been registered by the time the Donor is becoming or has become mentally incapable of managing their own affairs, the Attorney(s) can register it then. Registration is a straight forward procedure. There is a one-off fee to the Office of the Public Guardian of £130 . The process takes about 8 to 10 weeks (to allow anyone sent a notice of intention to register to object). The Lasting Power of attorney cannot be used during this interim period.
There is a duty under common law for the Attorney(s) to keep accounts and the Office of the Public Guardian can call on the Attorney(s) to account for their dealings at any time.
Risks and Safeguards
- It is clear that an Lasting Power of attorney is a very powerful legal document so Attorneys must be chosen with great care (and should be people the Donor trusts implicitly).
- Once the Lasting Power of attorney has been registered, if there are concerns that an Attorney may not be acting in the Donor’s best interests under an Lasting Power of attorney, the Court of Protection can become involved and further enquiries may be made.
- An Attorney's power to make gifts (to himself or others) or whether he can use his powers for the benefit of himself or others are restricted and an Attorney should seek advice from the Office of the Public Guardian if there is any doubt.
- A Donor can revoke his/her at any time while still mentally capable.
How do I get a Lasting Power of attorney?
The process is a little complicated and the form needs to be completed carefully. Your Moneta Partnership consultant will be able to guide you through the process and explain the decisions you must make and will be able to act as your certificate provider when it comes to signing the document.