Your Questions about Powers of Attorney
The basics:
- Donor – person making a power of attorney (you.)
- Attorney – person or persons you are appointing to act on your behalf.
- Conditions/ Instructions – specific instructions to your attorneys.
- Preferences – your wishes to guide the attorneys.
- Certificate Provider – a requirement for Lasting Powers of Attorney – a person who confirms that you have the ability to make your own decisions.
What is a Power of Attorney?
They are a way of authorising certain people of your choice to make certain decisions on your behalf, typically when you are unable too. It isn’t quite that simple, but that is the general idea.
Who Should Have Lasting Powers of Attorney?
Simple question – everyone over 18 should have both types. Under 18, your parents are in charge, over 18 the Court of Protection is and the ages of 18 to 23 are a fairly dangerous time for young adults. They are the perfect thoughtful (if a little boring) gift from parents or grandparents and powers of attorney are MUCH more important than a Will.
Types of Power of Attorney
- General Power of Attorney – for short-term use for example so your solicitor can exchange contracts while you are away on holiday. Often used for carers to collect pensions. A very BIG warning here: naming a person on your bank account to enable access to it is often mistaken by executors (and banks, who should know better) for gifting that account to them when you die.
- Advance/ Medical Directive – specialised power dealing with specific matters – typical example Jehovah’s Witness banning doctors from using blood transfusions etc.
- Enduring Power of Attorney – old style authorising person or persons to deal with your financial affairs, typically only if you lost mental capacity, so most would not work if you were merely seriously ill. The new version is:
- Lasting Power of Attorney Property & Financial Affairs: these are often wrongly set up, but they authorise a specific “attorney” or attorneys to manage your financial affairs under certain circumstances, typically when you have lost mental capacity. The attorneys can sell your house (should it be appropriate) but they can’t move you, which is something of an issue for the many folk who have been told the next type of Power of Attorney is unnecessary.
- Health and Welfare Lasting Power of Attorney. These deal with all the soft issues: doctors, who you see, what you eat, where you live etc. In my opinion, the most crucial power is that they give your attorneys the authority to argue with Social Services if they decide you have lost mental capacity after a brief interview and want to put you into care via a “Deprivation of Liberty” order. In these circumstances, no one other than your attorney has the authority to say NO – not you, not your wife, husband, children and not your common-law husband or wife. Otherwise, it is off to the Court of Protection (below.) Incidentally, Health and Welfare LPAs are often referred to as Medical Directives, which is not really correct, they are much wider than that. The Welfare part covers where you live, who you see, what you eat, what you wear and much more.
Power of Attorney v Enduring Power of Attorney v Lasting Power of Attorney
An attorney’s job is a lifetime appointment for Lasting & Enduring Powers of Attorney (unless changed by the donor) – it comes to an end when the person whose Power of Attorney it is dies. Then the executor of the Will takes over. It is helpful if the attorneys can see the Will, so they are aware of who the beneficiaries are and can take that into account.
I think it is important to emphasise that attorneys acting under any type of power of attorney are acting illegally if they do anything after the donor has died, as their authority does with the donor.
Which Power of Attorney Offer Should I Go For?
If you are going to pay someone to create Powers of Attorney for you, then you should expect a robust conversation and sound advice. There is no point in paying someone simply to fill the form in for you. Most powers of attorney are relatively simple, for professionals, but non-experts will miss the ones that are not. Price is not everything, but there is no point in paying through the nose either. I like to think my fees for Powers of Attorney are pretty modest for a professional service. Anyone who does not have full professional indemnity insurance should be avoided. Members of the Society of Will Writers, IPW, and solicitors should in theory all be knowledgeable but some have no directly relevant ongoing training at all, so always ask, and get it in writing (or email). Solicitors are expected to know all about everything by the public, but their brains are no bigger than the rest of us, so that is not possible, though big firms will usually have specialists – at big firm fees. Roughly 75% of my legal work is on Lasting Powers of Attorney.
Benefits of Lasting Powers of Attorney
- YOU chose who will manage your finances and health and welfare should you be unable to, temporarily or permamantly. nAnd do it whilst you are fully fit and alert.
- YOU can set out your wishes and concerns for them to take into account – rather than guess, perhaps wrongly.
- YOU can make it easier for your family with your guidance.
- YOU can avoid the need for expensive and slow Court action where the family disagree with official decisions over which they have no control without Lasting Powers of Attorney.
- YOU can avoid the possibility of the Local Authority Social Services or a solicitor appoint as your deputy making decisions neither you nor your family would agree with, at considerable cost, by the smile expedient of investing in Lasting Powers of Attorney. Call me!
How to get a Lasting Power of Attorney – some LPA Guidance
In theory, to get a power of attorney, all you need is yourself, an attorney and a certificate provider, and the forms from the Office of the Public Guardian (OPG). Be aware that the OPG are incredibly picky, and the slightest error will get your LPA kicked out so you can redo it and pay to get back in the long queue again. But more to the point, they are legal documents which professionals need hours and hours of ongoing training on, primarily to ensure that the OPG doesn’t either refuse registration or ask the Court of Protection to “sever” restrictions or requests it doesn’t like. Not only that but in my opinion, probably three in four DIY Lasting Powers of Attorney are set up incorrectly. They may well pass OPG scrutiny, but in the long run, they will cause problems that could have been avoided with sound advice.
Lasting Power of Attorney Cost
I have seen them advertised at anything between £49.99 and £1,500. My prices are apparently towards the lower end of those on which you actually get insured advice – and I can’t see that happening at the bottom end. At that end, you might just as well fill in the forms yourself and hope for the best. Don’t forget registration costs, which are further down the page.
Is it to late if I have been diagnosed with Early Stage Dementia?
In most cases, this does not stop you from getting Lasting Powers of Attorney, but that could change at any time, so the recommendation would be to call me NOW (leave a message out of hours). The key issue is that you need to be well enough to understand what a Lasting Power of Attorney is and the consequences of choosing the wrong attorneys. It is urgent, as not only might your health deteriorate unexpectedly fast, but there is a very long wait for approval and always the possibility of the application being refused for some minor error. If you don’t get your powers of attorney in time, then this is what happens:
What Happens If I Have No Lasting Powers of Attorney or Only One?
The Court of Protection protects anyone who has lost mental capacity, but its processes are slow and expensive. Most people will need lawyers to represent them and complete the necessary paperwork. Generally speaking, the Court will not permit Health and Welfare decisions to be delegated to a court-appointed “deputy” and will insist that a Judge make such decisions. See here for current Court of Protection fees per decision.
These are the notes for making a Health and Welfare application for a Court ruling.
Urgent decisions can be made via a special hearing at the Court (not cheap) and in time, the Court will appoint someone to manage your financial affairs – that is a Deputy. Sometimes, a family member will be lumbered – a deliberate choice of word – when taking out a bond and dealing with all the paperwork generated by the Court. They won’t be paid. If there is any concern, then the Court will appoint a Professional Deputy (usually a solicitor) to manage your affairs, and all costs will be recovered from your estate.
The functions of the Court of Protection are:
- Making Health and Welfare decisions (not many deputyship orders are made for health and welfare.)
- Appointing a Property and Financial Affairs deputy.
- Deciding whether a decision taken on behalf of a person is appropriate.
- Settling disagreements on mental capacity that can’t be settled elsewhere.
- Challenges to an authorisation for the deprivation of liberty safeguards or disputes about their use.
When Should I Register a Lasting Power of Attorney?
The Office of the Public Guardians policy is now that all Lasting Powers of Attorney should be registered immediately, basically due to their own inefficiency as it currently takes a crazy 20 weeks to register a perfect Lasting Power of Attorney. Until they are registered, they convey no authority whatever to the attorneys, so this is a bit of a dilemma as the Court Fee for registering each one is £82. Enduring Powers of Attorney are different in that some do allow use before registration, but they cannot be used after that until they are registered.
Remission, Exemption or Discounts on Registering EPAs and LPAs
Sadly, this is not as straightforward as one would like. Many professionals do not even mention the option, as the time involved in dealing with it could easily outweigh the income from providing the service in the first place. If you DO qualify, GET IT REGISTERED NOW. So it may still be a good time to save at least a bit more than just my modest fees!
Exemption
If the donor receives any of the following means-tested benefits when an application to register is made, they can apply for an exemption, or their attorney can do so on their behalf:
• Income Support
• Income-based Employment and Support Allowance
• Income-based Jobseeker’s Allowance
• Guarantee Credit element of State Pension Credit
• Housing Benefit
• Council Tax Reduction/Support – also known by other names (not the 25% single person discount or the Class U exemption)
• Local Housing Allowance
• A combination of Working Tax Credit and at least one of:
– Child Tax Credit
– Disability Element of Working Tax Credit
– Severe Disability Element of Working Tax Credit
Not included: Disability Living Allowance, Invalidity Benefit, Personal Independence Payment.
Exception: If the donor has been awarded personal injury damages of more than £16,000 which were ignored when they were assessed for one of the above benefits, they won’t qualify for exemption.
Remission: a 50% discount on registration fees:
Remission based on income: If the donor’s gross annual income is less than £12,000, they may be eligible for a 50% reduction of the fee. Gross annual income is income before tax.
It may come from employment, non-means-tested benefits (such as Attendance Allowance, Disability Living Allowance or Personal Independence Payment), pensions, Pensions Savings Credit, interest from savings and investments, or the rent of property.
Remission based on Universal Credit
A donor may qualify for remission if they receive Universal Credit.
Supporting evidence of Universal Credit
Hardship
If the donor doesn’t qualify for remission or exemption, but paying fees would cause hardship – for example, paying would mean they couldn’t meet normal living costs – you can apply to have fees waived. To claim write to OPG explaining why payment would cause hardship, enclosing bank statements and other documents showing all savings, income and outgoings.
