We make thousands of decisions each day, and it’s all too easy to take for granted our ability to do so. Sometimes, things get in the way of us being able to make decisions. Sometimes those things may be small – like us being occupied with other tasks or projects that deserve our immediate attention, or we are away in another country for a while. Sometimes those things may be more serious or ongoing, for example impairment of our ability to make important decisions due to illness, brain injury or even older age. Here we explain why an LPA should be considered.
What is a Lasting Power of Attorney (LPA)?
A Lasting Power of Attorney (LPA) is a legal document that you put in place whilst you still have full mental capacity, ready for a time when you may not have full mental capacity. The person(s) you appoint can assist you with decisions, or make decisions for you, out of necessity or out of convenience. Without an LPA in place, it very quickly becomes difficult for very important decisions to be made about Health, Money or the Business of the person who needs assistance with making decisions.
Who is involved with an LPA?
The Donor – this is the person making the LPA, who is giving power over to another person or other people to assist them with making decisions. The Donor must sign the LPA forms.
The Attorney/Attorneys – a person or people that the Donor appoints to help them make decisions. All Attorneys appointed must sign the form, even if they are only reserve or replacement Attorneys.
The Certificate Provider – a person who certifies that the Donor knows the effect of making the LPA, and certifies that the Donor is not under any duress or undue influence to make the LPA. The Certificate Provider must also sign the form.
What types of LPA are there?
There are two types of LPA – Property & Financial Affairs and Health & Welfare.
A Property & Financial Affairs LPA covers decisions about your finances, from paying debts including bills, through to receiving payments from work, benefits, interest, rent, or even selling a property. Once this LPA has been registered with the Office of the Public Guardian, it can be used straightaway (with the consent of the Donor if they still have full mental capacity), or it can be used later and only when the Donor’s mental capacity is impaired or lost.
A separate Property & Financial Affairs LPA for business may be appropriate where different Attorneys would be best placed to assist with business decisions. Company articles, or the business Partnership Agreement may well contain provisions allowing the removal of directors who lack mental capacity. However, mental health discrimination law may frustrate any attempt to remove a director or partner with impaired mental capacity, and so a property & Financial Affairs LPA for business should be a priority.
A Health and Welfare LPA covers decisions about medication, day-to-day care, and even life-sustaining treatment. Unlike a Property & Financial Affairs LPA, a Health & Welfare LPA can only be used once mental capacity is impaired or lost. As health is directly liked to quality and enjoyment of life, people often make both types of LPA at the same time.
What if I don’t have LPAs in place?
If you need help with decision-making due to impairment or loss of mental capacity and you don’t have LPAs in place, the only other route available is to make an application for Deputyship to the Court of Protection. Unlike LPAs, an application for Deputyship requires a mental capacity assessment to be undertaken which is costly and time consuming. In addition to this assessment, other forms need to be completed and further court hearings may be required. Where LPAs often take 8-10 weeks for the Office of the Public Guardian to register, obtaining a Deputyship order commonly takes around 12 months. Also, unlike the ease by which a Health & Welfare LPA can be put in place, it is far more difficult to persuade the court that a Deputyship order for welfare is necessary. One reason for this is judicial decisions being made against making a welfare Deputyship order based on the view that the vast majority of decisions about incapacitated adults are taken by carers and others without any formal general authority.
Deputyship brings additional burdens for the Deputy, including but not limited to the need to prepare annual accounts returns to the court. Such requirements simply do not exist for the LPA equivalent. Regarding court costs, to register an LPA with the Office of the Public Guardian is £82, or £164 for both types of LPA. If you are on a lower income, or in receipt of certain means-tested benefits, this cost may be halved or even fully exempted. By contrast, the fees and associated costs for making an application for a Deputyship order commonly stretch into the thousands of pounds.
What else should I consider in addition to LPAs?
People often consider reviewing their Will, or making a Will if they do not have one already, at the same time as putting LPAs in place. Wills and LPAs share the same benefits and principles of sensible, prudent forward-planning. Of course, the fundamental difference between a Will and an LPA is that a Will only takes effect after the person dies, whilst LPAs cease to have effect when a person dies.
If someone has sufficiently impaired or lost metal capacity they cannot make a Will. So, much like LPAs, a Will must be put in place whilst the person still has sufficient mental capacity. If there is no Will, or changes want to be made to a Will of a person who has impaired or lost mental capacity, an application can be made to the Court of Protection for a Statutory Will. Additional forms need to be completed, including a witness statement, and also a mental capacity assessment performed by an appropriate professional at additional cost. Also on the subject of costs, a Will can often be made for free or at very reasonable cost through a solicitor like SO Legal. By contrast, the application fee for a Statutory Will is currently £365, with a further court fee of £485 is the court decides a hearing is necessary. This is of course in addition to the costs of obtaining a mental capacity assessment.
In conclusion, the benefits of planning ahead are generally well-known. However, when it comes to help with decisions when you are alive, and carrying out your wishes when you have gone, putting in place LPAs and a Will that reflects your current wishes has never been more important, not just for yourself but for those that you are about most.
SO Legal Solicitors Eastbourne – 01323 407555
SO Legal Solicitors Brighton & Hove – 01273 069920
SO Legal Solicitors Notting Hill – 0203 9677700