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People can become unable to manage their affairs at any stage of life. An accident, physical ill health or the onset of mental illness may make everyday tasks such as paying bills, managing a budget and making financial and welfare decisions difficult, stressful and, in some cases, impossible.
By planning ahead it is possible to prepare your affairs so as to alleviate such a situation. You can appoint a person or persons (known as Attorneys) to make decisions and sign documents on your behalf.
Lasting Powers of Attorney
Prior to October 2007 it was possible to make an Enduring Power of Attorney, enabling your Attorney(s) to deal with your property and affairs on your behalf. It is now no longer possible to make an Enduring Power of Attorney, although those made before October 2007 are still valid and can either be left in place, run alongside an additional document, or be revoked by you.
There are two types of Lasting Powers of Attorney ("LPA") and you may choose to make one or both:
- One for your property and affairs (being your finances and business arrangements).
- The other for your personal welfare (dealing with decisions relating to your health and welfare).
Who can be appointed as your Attorneys?
You can appoint as many Attorneys as you like provided they are over the age of 18 and have not been made bankrupt. It is essential that you appoint someone you would trust to make the right decisions for you. Please note that you do not have to appoint the same Attorneys for your Property & Affairs LPA and your Personal Welfare LPA.
If you appoint more than one Attorney you must decide whether they should be appointed jointly or jointly and severally:
- Jointly appointed Attorneys must all sign documents together and must all make decisions together. This can safeguard against an Attorney acting inappropriately.
- If you choose to appoint your Attorneys jointly and severally, they will be able to act independently of each other and do not need to act together or agree decisions between them.
The LPA allows you to appoint substitute Attorneys to act if one or more of your original Attorneys is unable or unwilling to act for you.
Restrictions and guidance for your Attorneys
You can restrict the decisions that your Attorney(s) can make, e.g. which of your financial organisations they can deal with, or specify that your LPA can only be registered if you have lost your mental capacity.
You can also give your Attorneys guidance as to your wishes. This can be particularly important if you decide to proceed with a LPA for your personal welfare e.g. you could stipulate that you wish to remain living in a certain area or you wish to go into a nursing home only as a last resort.
When you make your LPA you will need one or two people to act as Certificate Providers to confirm that they believe you have sufficient understanding of the document and its consequences and that you are not being pressurised to sign it. You should choose your Certificate Provider(s) yourself from the following categories:
- Knowledge Certification - this can be someone who has known you for at least 2 years and need not be a professional person.
- Skills Certification - this can be someone who has the relevant professional skills and expertise to certify your LPA e.g. a solicitor, GP or social worker.
Registration of your LPA
Your LPA can only be used once it has been registered with the Office of the Public Guardian. There is a fee payable to the Office of the Public Guardian (currently £110 per document per person).
When your LPA is prepared you are asked to provide details of one or more people to be notified in the event that your LPA is to be registered with the Office of the Public Guardian. You can choose to notify your spouse, a relative or a friend, but not your Attorney(s) or substitute Attorney(s). This is an important safeguard as it enables those you have nominated to contact the Office of the Public Guardian if they have any concerns relating to the use of your LPA.
If you do not name anyone to be notified you will need two Certificate Providers (see above).
If those persons you have nominated do not object to the registration of your LPA the Office of the Public Guardian will stamp the document, which can then be used by your Attorney(s).
It is important to remember that it can take several weeks for the Office of the Public Guardian to register your LPA and your Attorney(s) will not be able to rely on the document in the meantime.
Once registered, your Property & Affairs LPA can be used whilst you still have capacity (unless you specify that your Attorney(s) cannot act). A Personal Welfare LPA can only be used once you no longer have the capacity to make the required decisions relating to your welfare.
You can revoke your LPA at any time (whether it has been registered with the Office of the Public Guardian or not) provided you have the mental capacity to sign the revocation document.
What happens if you do not have an LPA in place?
Problems can arise if you lose your mental capacity but do not have a LPA (or an existing Enduring Power of Attorney) in place. If decisions need to be made on your behalf the Court of Protection will appoint a Deputy to act for you but the Court may not necessarily appoint someone you would have chosen yourself. This is an expensive and time consuming alternative to making an LPA.