Why do I need an LPA?
Lasting Powers of Attorney
A Lasting Power of Attorney (LPA) is a document which legally enables one or more individuals you know and trust, your Attorneys, to have the power to make decisions on your behalf if you lose Mental Capacity (‘capacity’). Unlike a Will, which deals with your estate when you are no longer here, an LPA deals with your Financial and Care decisions while you are alive but lack capacity. There are two types of LPA: a Property and Financial LPA and a Health and Welfare LPA.
Plan for the Future
Contrary to beliefs like, “I would never need an LPA”, or “My next of kin will get the final say”, the reality is that everyone needs an LPA, regardless of age or current mental health status. A former Lord Chancellor and Secretary of State for Justice said in 2007, when LPAs were first introduced, “We all know how important it is to plan for the future. Having a Lasting Power of Attorney (LPA)…in place should be as common and natural as making a Will”. Less than 1% of the adult UK population has an LPA. However, 1 in 3 persons over the age of 65 in the UK develop dementia (Alzheimer’s Society), and every 90 seconds, someone in the UK is admitted to a hospital with an acquired brain injury (Headway). The following are four reasons you should make and register one or both types of LPA.
1. Choice
When capacity is lost, and no LPA is in place, the only alternative is an application for a Deputyship order submitted to the Court of Protection. With a Deputyship application, anyone over 18 can apply to the Court of Protection to be your Deputy to make Financial decisions on your behalf. If your Deputy is over 18, they have the necessary financial skills, and if nobody objects to the application, then deputyship will be granted. The appointed deputies may not necessarily reflect your intentions. Without an LPA, you would be giving up your power of choice and leaving it to the Courts to determine who should decide on your behalf and how those decisions will be made. Take your power back, and do not let a stranger or someone you may not have chosen yourself take control over your Financial and Care decisions. In the case of a Property and Financial LPA, you can specify whether your Attorneys can use the LPA immediately upon registration or only when capacity is lost. You also gain control over exactly how your attorneys can act. You can appoint your Attorneys to act (1) jointly, (2) jointly and severally, or (3) jointly for some decisions but jointly and severally for other decisions (the hybrid power). Without an LPA in place, you would put your family and relatives in a difficult situation when they have to decide who will act on your behalf if you lose capacity.
2. Costs
For the Court of Protection to grant permission for a Deputyship order, the initial Court application fee is £385.00, excluding legal fees and the ongoing annual fees payable to the Court of Protection. The registration fee to register one LPA, be it (a) Property and Financial or (b) Health and Welfare with the Office of the Public Guardian (‘OPG’), is £82.00 only, payable to the OPG by cheque or card. Factoring in the initial costs, any legal fees, and the ongoing supervision charges, having an LPA completed and registered is by far the most cost-effective and reasonably priced solution compared to applying for a deputyship order.
3. Time
Registering an existing LPA with the OPG takes between a minimum of 4 weeks and a maximum of 16 weeks. When capacity is lost, and no LPA is ready to be used, a Deputyship application must be submitted so that at least one deputy is appointed to act. Processing a Deputyship application through the Court of Protection can take six months or more; this is when you will have already lost capacity, and the appointment is desperately needed. A Deputyship application is a more time-consuming undertaking compared to the shorter time required to create and register an LPA in advance with the OPG.
4. Instructions
LPAs allow you to specify any preferences you would like your Attorneys to know when they start dealing with your Property and Care decisions. Preferences are non-binding expressions of wishes that your Attorneys are expected to keep in mind when making decisions on your behalf. LPAs also allow you to make known any Instructions you may have for your Attorneys. These are legally binding, and your Attorneys must follow them. As part of your instructions, you can grant your attorneys access to your digital assets, online bank accounts, and will. You can also use the Instructions section of your LPA to make known any charity donation wishes and give Discretionary Investment Management instructions.
5. Avoid criminal activity
An attorney logging onto the donor’s bank account to pay bills or care fees may be committing a criminal offence under sections 1 and 2 of the Computer Misuse Act 1990, unless the bank consents to the transaction after being made aware of the above instruction in an LPA or GPA.
The earlier an LPA is completed and registered, the better.
With an LPA document in place, you have peace of mind and complete estate planning control. You would have specifically selected your Attorneys and given them authority to make Financial and Care decisions on your behalf. LPAs allow you to choose any replacement Attorney and even a professional attorney (such as a trust corporation) if your primary Attorney is unable or unwilling to act. Finally, suppose you lack capacity, but your Property and Financial LPA is not registered. In that case, your attorneys cannot access your bank accounts to pay for expenses such as care home fees until they validate your LPA, which is officially stamped and registered with the OPG. If you hold an account jointly with someone else, they will be unable to operate it until the bank produces an LPA or Deputyship order. To learn more about creating and registering an LPA, please contact Fern Wills & LPAs, and we will be happy to assist.
