What is a Lasting Power of Attorney? Why are LPAs Vital?

What is a Last Power of Attorney? It is a legal document that you can set up (given enough time) to allow your husband, wife, children or friend to make decisions for you under certain circumstances.  Typically, that would be if you are unable to (maybe you were in a coma or had got so old you didn’t want to be bothered with minor decisions, just major ones)., or if you wished to delegate some or all decisions as you no longer wished to be bothered.

Many Lasting Powers of Attorney, in our opinion, are set up wrongly. Accidents and strokes etc can happen at any age, so ideally, LPAs should be an 18th birthday present and reviewed every couple of years. Many people also only have one, and not both, and that can be disastrous both personally and financially.

What is a Lasting Power of Attorney?

In England and Wales, there are several types of Power of Attorney, so you understand how Lasting Powers of Attorney fit in, and whether or not they are needed.

  • General Power of Attorney – these are generally used in the short term. For example, you might be buying a house, but are away for a long holiday. Your lawyer might well get you to sign a General Power of Attorney so they could sign (as an attorney for you) and exchange contracts on your behalf while you were away. Or maybe you can’t easily get to the bank. If you were not mentally competent to make the decision, the General Power of Attorney would be useless.
  • Medical Directive: these cover specifically medical matters only. For example, a Jehovah’s Witness might well have one confirming an absolute refusal to have a blood transfusion.
  • Enduring Power of Attorney (EPA). As long as it was signed before 1st October 2007, these were the predecessors to the Property & Financial Affairs Lasting Power of Attorney. You could appoint 1 or more people to act as financial attorney for you under circumstances you decide when making the EPA. They are still potentially valid, but were usually set up to be used only when Mental Capacity has been lost, at which point they need to be registered with the Office of the Public Guardian. If they are not restricted to use only when mental capacity has been lost, then they can act as a General Power of Attorney beforehand, with your permission (or potentially without if you don’t have them stored, for example, by our Peace of Mind Service.
  • Lasting Power of Attorney Property and Financial Affairs (Finance LPA): the modern version of the Enduring Power of Attorney, and much more widely recognised these days. In essence, they cover pretty much every type of financial or property-related decision (with one major hitch). They are very tricky documents, and they have no legal validity until they have been registered by the Office of the Public Guardian.  If you are planning to be seriously ill or have an accident, allow 3 months to get Lasting Powers of Attorney.

     What is the problem with Finance LPAs? 

They don’t cover Welfare matters, so whilst they will allow you to pay (for example) Care            Home Fees – your family attorneys will have NO CHOICE over which care home you are put in – that will be decided by Social Services.  If the family don’t agree – TOUGH – unless you have set up:

  • Health and Welfare Lasting Power of Attorney: these do what they say, allow you to appoint attorneys to look after your health and welfare. Unlike the Finance LPA, there is no option to allow them to be used except when you are unable to make decisions yourself within a reasonable time considering the urgency of that decision.

There are a number of reasons why you might need someone to make decisions for you or act on your behalf:

  • This could just be a temporary situation: for example, if you’re in a hospital and need help with everyday tasks such as paying bills.
  • You may need to make longer-term plans if, for example, you have been diagnosed with dementia and you may lose the mental capacity to make your own decisions in the future.

So what is mental capacity?

Mental capacity is the ability to make and communicate specific decisions at the time they need to be made. To have mental capacity you need to understand the decision you need to make, why you need to make it, and the likely outcome of your decision. If you need help to fully understand, your attorneys would be required to make all reasonable efforts to help you make your own decisions – unless you don’t wish too.  And your decisions don’t have to be wise in the eyes of your attorneys!

Some people will be able to make decisions about some matters but not others. For example, they may be able to decide what to buy for dinner, but be unable to understand and arrange their home insurance. The ability to make decisions may change from day to day, and from time to time during the day – attorneys need patience if they are to act correctly.

Needing more time to understand or communicate doesn’t mean you lack mental capacity. A diagnosis of dementia doesn’t automatically mean that they can’t make any decisions for themselves. Where someone is having difficulty communicating a decision, serious attempts should always be made to overcome those difficulties and help the person decide for themselves.

What if I don’t have a Lasting Power of Attorney?

If you lose the mental capacity to make or communicate your own decisions before setting up a power of attorney,  the Court of Protection may become involved. That is a slow, expensive process with results in a Judge appointing a person to make decisions on your behalf.  That may be a solicitor (who will charge you for the time) or if the family is united, maybe a family member,  That person will need to complete regular reports, buy special insurance and pay (all out of your savings) for Court of Protection supervision.  Best avoided by contacting us today to put Lasting Powers of Attorney in place.  Whilst we are based near Eastbourne in Sussex, we can assist anywhere in England and Wales, usually without the need for a face to face meeting.

Contact us to Make Lasting Powers of Attorney.

How to Make a Lasting Power of Attorney

You can make a lasting power of attorney ( LPA ) online or using paper forms. Either way, you need to get other people to sign the forms, including the attorneys and witnesses. You can get someone else to use the online service or fill in the paper forms for you, for example a family member, friend or solicitor. Some people do it all themselves without advice, but these are such complex documents with such massive repercussions if they are not properly thought through and correctly set up.  There is much more to setting up a Lasting Power of Attorney than just filling in a form.

Mental Capacity to make a Lasting Power of Attorney

Mental capacity is your ability to make decisions for yourself. When making a Lasting Power of Attorney, that needs to be backed up by someone called a Certificate Provider who confirms that you do have the mental capacity to set up an LPA.

But mental capacity is not necessarily something that you have or you don’t have. You may be able to reason and to make decisions perfectly well about some matters, such as how your finances should be managed, but not about other things, such as where you would like to live.

You can also be mentally capable at certain times of the day, but not at others.

Having mental capacity is not a simple YES or NO matter. Loss of mental capacity regarding certain matters might be the reason that you seek a diagnosis for dementia, but having dementia might not prevent you from making an LPA.

Of course, it is best if you plan as early as possible for your elderly care, or accidents .

The Mental Capacity Act outlines five key principles and provides an assessment framework referred to as The Two Stage Test. The first step: do you have any general impairment that affects your ability to make a decision, such as dementia?

  1. If you have an impairment, then the second stage is to check the following for a particular type of decision:
  2. Comprehension: can you understand relevant information relating to the decision.
  3. Memory: can you can remember the information for the duration of the decision-making process.
  4. Judgment: can you can weigh up and use relevant information to make a decision.
  5. Communication: can you can communicate your decision, either verbally or non-verbally.

If you have these four attributes for a particular decision, then you have mental capacity to make that decision.