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.
Make a Lasting Power of Attorney (parent page).
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 legally be used if the donor has lost mental capacity 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!
Click here for the necessary form – if we have prepared the LPAs, we will help with it, but it is too time consuming otherwise I am afraid.
What is Mental Capacity?
Mental capacity may vary from the type of decision needed and the nature and urgency of that decision. Unwise decisions are OK, that does not of itself prove that mental capacity is absent. Commonly a person may know what they want for breakfast, but they may not understand the need for (worst case) moving into a care home, or making investment or business decisions even with help. More details further down under the 5 Principles of the Mental Capacity Act.
Is it true that a parent of a child over 18 cannot make decisions for their child without LPAs?
Yes. They can apply to the Court of Portection for a Deputyship , if the child does not have mental capcity, but this is a slow and expensive process which may end up with a solicitor being appointed and costs being paid from the childs estate.
Is it true that a wife/ husband / civil partner cannot make decisions for their partner?
Yes, see above.
Is it true that a business can fold for the lack of its owners or directors having LPAs?
Yes in the event of loss of mental capacity, and the staff probably lose their jobs. This especially affects smaller business rather than public companies.
What is the difference between a general power of attorney and a Lasting Power of Attorney?
Similarly to that of a General Power of Attorney, you must have full mental capacity to enter into a Lasting Power of Attorney. A Lasting Power of Attorney, however, will operate, or cpntinue to operate depending on how it was set up, even if you lose the ability to make decisions in a reasonable timescale depending on the urgency. This can be mentally or physically, or if you no longer wish to make decisions for yourself. However, the General Power of Attorney is considered a temporary measure to allow someone to handle a financial transaction while you are unavailable – perhaps on holiday.
A tpical example of the use of a General Power of Attorney would be to authorise your solicitor to sign contarcts for you while you were on holdiay. You MUST have mental capacity to create either type of power of attorney, but the General Power of Attorney is no longer valid if you lose mental capacity.
What are the rules for Lasting Power of Attorney?
You can only make an LPA if you have the necessary mental capacity. If you are making a property and financial affairs LPA you can choose whether your attorneys can make decisions as soon as the LPA is registered, or only when you have lost the capacity to make those decisions yourself. The Health and Welfare Lasting Power of Attorney can ONLY be used when you don’t have the ability to make a decision within a timescale reasonable in the circumstances. An example might be a problem during an operation on a person who has mental capacity to make the decision, but if the surgeon wakes him up he will die without the decision being made. In such a circumstance the ability to make the decision exists – but not within a reasonable timescale so the Health and Welfare Attorneys could potentially make the decision,
Do I need a solicitor to make a Lasting Power of Attorney?
While you don’t have to use a solicitor to create an LPA, it could prevent problems later on – especially if you’re unsure of the process or your affairs are complex. It’s more costly than filling the forms yourself, but you might find that the reassurance of having professional advice is worth it. That said, Professional Will Writers are often far more experienced in writing LPAs, and usually at a substantially lower cost. Some solicitors are, of course, specialists, but most are not.
What are the four types of power of attorney?
There are four different types of power of attorney: two types lasting power of attorney (LPA – finance and welfare), enduring power of attorney (EPA) and ordinary or general power of attorney. LPAs came into force in October 2007. Before that, people made EPAs which could not cover health and welfare matters, just financial. It’s no longer possible to make or amand an EPA, but an EPA made before October 2007 remains valid, though often would not be written in the same way these days. The client (donor) must have mental capacity to make a power of attorney, and ideally should put one in place on their 18th birthday or face the possibility of the Court of Protection making decisions for them, rather than family or spouse.
The five key principles of the Mental Capacity Act:
Principle 1: A presumption of capacity
Every adult has the right to make his or her own decisions and must be assumed to have capacity to do so unless it is proved otherwise. This means that you cannot assume that someone cannot make a decision for themselves just because they have a particular medical condition or disability.
Principle 2: Individuals being supported to make their own decisions
A person must be given all practicable help before anyone treats them as not being able to make their own decisions. This means you should make every effort to encourage and support people to make the decision for themselves. If lack of capacity is established, it is still important that you involve the person as far as possible in making decisions.
Mental Capacity Act principle Principle 3: Unwise decisions
People have the right not to be treated as lacking capacity merely because they make a decision that others deem ‘unwise’. Everyone has their own values, beliefs and preferences which may not be the same as those of other people.
Mental Capacity Act principle Principle 4: Best interests
Anything done for or on behalf of a person who lacks mental capacity must be done in their best interests.
Mental Capacity Act principle Principle 5: Less restrictive option
Someone making a decision or acting on behalf of a person who lacks capacity must consider whether it is possible to decide or act in a way that would interfere less with the person’s rights and freedoms of action, or whether there is a need to decide or act at all. Any intervention should be weighed up in the particular circumstances of the case.
What are the limitations of a lasting power of attorney?
An attorney must only make decisions that they have been given the authority to make. This means that: They cannot make a decision individually, if the LPA specifies decisions must be made jointly. They cannot make a decision about someone’s health and welfare if the donor has the mental capacity to make it themselves. They must always act in the Best Interests of the person whose LPA it is, NOT their own, and this is an area many attorney do not understand.
Can my mother change her will if I have power of attorney?
Provided she has mental capacity to make a Will, she can. As an attorney, the only way you can do so is to ask the Court to make a Statutory Will. An Attorney, be it a Property and Financial Affairs, or a Health and Welfare Attorney does not, and cannot have the authority to change or make a new Will for the Donor.
What can you not do with power of attorney?
However, there are also things you can’t do with a power of attorney and these are: Make financial gifts or loans to people, including family and friends, that are particularly large bearing in mind the estate and the custom of the donor. Their sole duty is to look after the best interests of the donor, which does not necessarily prevent proportionate gifts or loans but this is a difficult area. Take advice.
Can I sell my mother’s house with power of attorney in the UK?
If it is in your mothers best interests, and you have an LPA for Property and Finance, appointing you as an attorney, you and any other attorneys can, depedning on how the LPA is set up. But you can’t move her without a Health and Welfare LPA. If the idea of selling it is to release funds for others, chances are high that you will be corssing the borders of what is legal. Take advice.
What is the best power of attorney to have?
Generally people prefer the Property and Financial Affairs LPA, but the Health and Wefare is often the most crucial. Do you want the Courts (social Services) to decide which care home you go into, or how you should be treated in an emergency operation? Or would you rather appoint people you trust, who understand you? This is whu I don’t charge double for both types of LPA: I like to make it as easy as possible to be fully protected.
Do I have to register a power of attorney with the bank?
You’ll need to register with each bank you need to access and any other institutions. Many have access to the central register of LPAs for which attorneys and donors should be given an access key. Beware of people taking the LPA and losing it – let them take a copy and hand it straight back, or set up authorised copies. You will still need to prove your identity as an attorney.
Potential disadvantages of a Lasting Power of Attorney
The main potential problem with an LPA is whether your attorney is trustworthy and will deal with your affairs on your behalf in the manner in which you would want them to. Some people jyst don’t have anyone they trust, others need the reassurance of third part checks, and some would just prefer to appoint a professional – all things I can advise on.
Who cannot be an attorney on an LPA?
You can choose anyone you want to be your attorney, as long as they are over 18 at the time it is signed. For a property and affairs LPA, the person you choose cannot be bankrupt. Consider what an attorney has to do before making your choice and choose someone you trust who will act in your best interests.
Does a lasting power of attorney expire on death?
YES – any actions taken by attorneys after that are illegal as Lasting Powers of Attorney cease on the date of death so it is important you also make a Will to give instructions about what should happen after your death. On death, the Executors of the Will take over if there is one, if not, the next of kin (which usually provokes arguments!)
Can a power of attorney gift money to themselves?
A property and financial Power of Attorney can give themselves money (but they must balance this with your best interests in mind). If it is a small customary gift for a birthday which the donor was in the habit of giving to people, it is probably fine. But it is still dangerous territory.
What is more important, a will or power of attorney?
Both a Will and Lasting Power of Attorney are significantly important documents. There’s no overlap between the two as your Will protects your beneficiaries’ interests after you’ve died, and a Lasting Power of Attorney protects your own interests whilst you’re alive. If I had to chose, in straightforward familes, it would be the LPAs I would do first, unless there was a risk of imminent death.
Ask your questions about Lasting Powers of Attorney, Enduring Powers of Attorney or General Powers of Attorney here
– or give me a ring on 01323 766 766. If you have a question about Wills, include it here, you needn’t use the special form on the Wills page.
