Many people assume that their spouse, civil partner or children would automatically be able to make decisions for them if they became unwell or lost mental capacity. Unfortunately, that is not always the case. This is why Lasting Powers of Attorney are such an important part of later-life planning.
While many people understand the importance of making a Will, fewer appreciate the role that Lasting Powers of Attorney can play during their lifetime. Putting the right arrangements in place can help protect your interests, reduce stress for loved ones and ensure your wishes are respected if you are no longer able to make certain decisions yourself.
“One of the most common misconceptions we encounter is the belief that a spouse or adult child can automatically make decisions if someone loses mental capacity,” says Georgina Pollard, Solicitor in the Wills, Trusts and Probate team. “Unfortunately, many families only discover the limitations of this assumption when faced with an urgent situation. Putting Lasting Powers of Attorney in place early can avoid significant practical and legal difficulties later.”
What are Lasting Powers of Attorney?
A Lasting Power of Attorney (LPA) is a legal document that allows you to appoint one or more trusted people, known as attorneys, to make decisions on your behalf if you become unable to make those decisions yourself. You can only make an LPA while you have the necessary mental capacity.
There are two types of LPA:
Property and Financial Affairs LPA
This type of LPA enables your chosen attorneys to:
- Manage bank and savings accounts
- Manage investments
- Manage or sell property
- Pay bills and household expenses
- Handle pension and benefit matters
A Property and Financial Affairs LPA must be registered before it can be used. You can choose whether your attorneys are able to act with your authority as soon as it is registered, while you still have mental capacity, or only if you lose capacity to make the relevant financial decisions yourself.
Health and Welfare LPA
This type of LPA enables your chosen attorneys to make decisions relating to your health and wellbeing, such as decisions relating to:
- Medical treatment
- Care arrangements
- Life-sustaining treatment (if you authorise this when creating the document)
A Health and Welfare LPA can only be used if you lack mental capacity to make a particular health or welfare decision at the time it needs to be made.
What if you already have an Enduring Power of Attorney?
Enduring Powers of Attorney (EPAs) could be made until 1 October 2007. After that date, they were replaced by Property and Financial Affairs LPAs, although existing EPAs may still be valid.
It is important to be aware that EPAs only cover decisions about property and financial affairs. They do not cover health and welfare decisions.
If you have an EPA and begin to lose mental capacity, your attorneys will need to apply to the Office of the Public Guardian to register the document. This can create delays at a time when practical support may be urgently needed.
By contrast, LPAs are usually registered in advance so that they are ready to use when needed, subject to the terms of the document and the individual’s circumstances.
This is one of the key practical differences between EPAs and LPAs, and it is one reason why reviewing older arrangements can be so important.
We recommend reviewing any existing Powers of Attorney with a trusted adviser to confirm whether they remain valid and appropriate.
The Growing Importance of Powers of Attorney
Conditions such as dementia are becoming more common within our ageing population. According to Alzheimer’s Society, around 982,000 people are currently living with dementia in the UK, with that number expected to rise to 1.4 million by 2040.
Many families experience first-hand the difficulties that arise when no legal authority is in place for loved ones to step in and help. Making LPAs helps ensure that your wishes are known and respected, and that you choose who would make decisions on your behalf if you later became unable to do so yourself.
Importantly, LPAs are not just for older people. Serious illness, accidents and unexpected health conditions can affect individuals at any age. Making LPAs while you are fit and capable ensures that your chosen representatives can act if needed.
Common Issues We See in Practice
In practice, many of the difficulties surrounding LPAs arise because documents have not been put in place early enough.
We regularly advise families where a loved one has experienced a sudden illness or a progressive condition affecting mental capacity before an LPA was completed. In these situations, relatives are often surprised to discover that they cannot simply manage bank accounts, deal with utility providers or make certain healthcare decisions on behalf of the individual concerned.
Without a valid LPA, families may need to apply to the Court of Protection for a deputyship order. This process can take time, involve additional expense and create uncertainty during what is often already a difficult period.
We also assist clients who created EPAs or LPAs many years ago and whose personal circumstances have since changed. A review can help ensure that the people appointed as attorneys remain appropriate and that the arrangements continue to reflect the individual’s wishes and needs.
Common Misconceptions About Lasting Powers of Attorney
A common misconception is that a Will serves the same purpose as an LPA. In fact, a Will only takes effect on death and deals with what should happen to a person’s assets after they have died. By contrast, LPAs operate during a person’s lifetime and allow chosen attorneys to make decisions on their behalf if they are unable to do so themselves.
It is also often assumed that a spouse, civil partner or adult child can automatically make decisions for you if you lose mental capacity. In reality, without a valid Power of Attorney or court-appointed deputy, loved ones may not have legal authority to manage your finances, speak to organisations on your behalf or make important welfare decisions.
What if You Don’t Have Powers of Attorney?
To make a Power of Attorney, you must have the necessary mental capacity. If you do not have Powers of Attorney and later lose capacity, someone may need to apply to the Court of Protection to become your deputy. This involves a court application and is usually more costly and time-consuming than putting Powers of Attorney in place in advance.
How Wolferstans Can Help
At Wolferstans, we can work with you to prepare documents that are properly drafted, correctly registered and suited to your individual circumstances. We provide clear, practical and tailored advice to help you choose suitable attorneys and consider how your Powers of Attorney fit with your wider estate planning arrangements.
Our team can also advise on related matters including Wills, estate planning, Court of Protection applications and the review of existing Enduring Powers of Attorney and Lasting Powers of Attorney, helping to ensure that your arrangements remain appropriate as circumstances change.
If you are unsure whether your current arrangements are still suitable, or you would like to put LPAs in place, our team would be happy to guide you through the process. Speaking to a solicitor early can help avoid delay, uncertainty and additional cost later on.