There are two kinds of Lasting Powers of Attorney (LPA), one that deals with your Property & Financial Affairs and one that deals with your Health and Welfare.
These are critical legal documents that enable you to give legal authority to a person or persons who you trust, called Attorneys, to manage your affairs for you or make decisions on your behalf, when you are not in a position to do so yourself, for example following an accident, stroke or the onset of dementia.
An LPA is a legal document that lets you (the Donor – also known as ‘the person giving this Lasting Power of Attorney’) choose a person/persons Attorney/Attorneys) that you trust to make decisions on your behalf at a future time when you may not be able to make such decisions due to mental incapacity or simply no longer wish to make such decisions.
There may be a time when you may need someone to help you manage your property and affairs or personal welfare. This could be due to age, ill health or a loss of capacity. From 1 October 2007, the only option for creating a Power of Attorney which covers mental incapacity is in the form of a Lasting Power of Attorney (LPA).
The property and affairs LPA will enable your Attorneys to do things like draw your pension or pay your bills or sell a property for you. The health and welfare LPA enables your Attorneys to make decisions related to your health and personal welfare, for example what sort of care you receive, but this type of LPA can only be used once you lose mental capacity. Both types of LPA must be registered with the Office of the Public Guardian, before they can be used by your Attorneys.
Although we all tend to think of Wills and Lasting Powers of Attorney documents as useful for later life, it’s important to think what would happen now if you were unfortunate enough to have an accident or serious illness.
This allows the Donor to appoint an Attorney to manage their finances and property. An appointed Attorney can make any decision the Donor could make about his or her property and affairs such as buying and selling property, managing investments, paying bills, collecting benefits or other income – unless restrictions are included to the contrary. These are also useful documents for business owners who are sole traders, partners and also sole directors/shareholders.
This allows the Donor to appoint an Attorney to make decisions about personal welfare. This document can only be used when the Donor has lost mental capacity. Unless restrictions are included, the Attorney can do anything the Donor would have done regarding personal welfare, for example:
Anyone aged 18 years or over with capacity can make an LPA. Anyone can be appointed as a person’s Attorney so long as they are over the age of 18 years, have capacity and are not bankrupt. You can appoint more than one person to act. If you choose to appoint more than one then you have to decide how to appoint them. You can also appoint a substitute just in case something happens to an Attorney in your lifetime. Attorneys should be trustworthy and have a duty to act in your best interests and consider your needs and wishes so far as this is possible.
If you lose the capacity to be able to manage your affairs for whatever reason without a valid LPA then your personal affairs will become the responsibility of the Office of the Public Guardian. In these cases a person’s affairs are placed under the jurisdiction of the Court who appoints a Deputy to act on your behalf and the Deputy is therefore answerable to the Court. This can be an expensive route as Court approval is required for any act to be carried out, accounts have to be submitted to the Court every 12 months and financial decisions are not carried out by close family or friends.