Lasting Powers of Attorney are not just for the older generation!
Lasting Powers of Attorney (LPAs) are legal documents that allow you to appoint people you trust to make decisions on your behalf if you are unable to do so yourself. There are two types – one dealing with property and financial affairs and the other dealing with health and welfare matters.
When I discuss the importance of these documents with clients, unless they are approaching retirement age, many tell me that this is something they do not feel they need to put in place until they are much older when there is an increased risk of being diagnosed with conditions such as dementia.
However, every adult who has mental capacity should at the very least give thought to whether LPAs are appropriate for them. None of us know what life has in store for us – who could have imagined the situation we have found ourselves in this year with the COVID-19 pandemic?
Any one of us could be involved in an accident or be diagnosed with an illness which leaves us unable to manage our own affairs, either temporarily or indefinitely. For example, what if you were left paralysed following a car accident or were left with brain damage following a stroke?
If such a situation were to happen and LPAs are not in place, no one would have automatic legal authority to step into your shoes and make decisions for you. I find some clients assume that if they are married or in a civil partnership then their other half will ultimately be able to make decisions for them but this is not the case!
If mental capacity is lost then without a validly executed and registered LPA in place, someone would need to apply to the Court of Protection to obtain a deputyship order allowing them to act on your behalf. This has three big disadvantages as compared to the position where LPAs are put in place:
- Timescales – it can often take 6-9 months to obtain a deputyship order from the Court and in the intervening period decisions cannot be made as no one has legal authority to make decisions. Once all relevant parties to the LPA have signed the document, the necessary registration process with the Office of the Public Guardian before the documents can be used is usually completed within 10 – 12 weeks, thus providing peace of mind that the documents are then ready to go in the event they are needed.
- Costs – it can often cost several thousand pounds to make an application for and then obtain a deputyship order whereas creating LPAs in and registering the same is a lot less.
- Control – the Court is ultimately responsible for appointing one or more deputies. Although they will be subject to more scrutiny than one or more of your own appointed attorneys, for instance in complying with the obligation to submit an annual report explaining decisions made over the year, a deputy or deputies may or may not be the person or persons you would want to be making important decisions on your behalf.
It is therefore the case that we should all at the very least give thought to putting LPAs in place. At the same time, these documents are powerful thus it is important that detailed consideration is given to:
- Who you are appointing as attorney(s) and possible replacement(s);
- When your attorney(s) should act – with the LPA for Property & Financial Affairs this can be used whilst you retain mental capacity so long as this is with your consent. This can be particularly helpful if you are feeling unwell preventing you from being able to leave the house or are on holiday for example;
- How your attorney(s) should act – if more than one – should they always make decisions together?;
- Life sustaining medical treatment – should this power be reserved to medical professionals?; and
- Whether separate LPAs are appropriate – i.e. whether you require different attorneys for personal finances and your business affairs.
At Whitehead Monckton we can help you ensure that all relevant issues are considered and that LPAs are created that are tailored to your particular circumstances. Please do not hesitate to get in touch today if you would like to discuss putting LPAs in place or to review existing documents (including Enduring Powers of Attorney).
We can also advise on:
- Creating general powers of attorney which can be put in place for use whilst you hold mental capacity, for example whilst pending registration of LPAs.
- Acting as professional attorneys.
- Advising attorneys on how to act under LPA.
- Preparing a deputyship application (e.g. if a relative has lost mental capacity has already).