Lasting Powers of Attorney are legal documents that let individuals appoint one or more other people to make decisions on that individual’s behalf.
The person making the appointment -namely the Donor- must be over 18 and must have mental capacity – ie the ability to make their own decisions - when they make a Lasting Power of Attorney. The Donor need not live in the UK or be a British citizen.
The person or people being appointed by the Donor are known as Attorney (s). The Attorney need not live in the UK, although for practical reasons Attorneys usually do. Common choices for Attorneys include a spouse or partner, children, nephews, nieces, siblings and professionals. Factors a Donor should take into account when choosing an Attorney include how well the proposed Attorney looks after their own affairs, for example, their finances, how well the Donor knows the proposed Attorney and if the proposed Attorney can be trusted to make decisions in the best interests of the Donor.
Donors can make either or both of two types of Lasting Powers of Attorney- a Property and Financial Affairs Lasting Power of Attorney and a Health and Welfare Lasting Power of Attorney.
A Donor making a Property and Financial Affairs Lasting Power of Attorney gives an Attorney power to make decisions about money and property, for example: power to manage a bank account, pay bills and sell a house.
A Donor making a Health and Welfare Lasting Power of Attorney gives an Attorney power to make decisions about, for example, the Donor’s medical care, moving into a care- home and life sustaining treatment.
Property and Financial Affairs Lasting Powers of Attorney can be used, if the Donor so stipulates, as soon as registered with the Office of the Public Guardian. This is not the case with regard to Health and Welfare Lasting Power of Attorney which can only be used when a Donor is unable to make their own decisions.
If a Donor appoints more than one Attorney the Donor commonly, but not always, appoints Attorneys “jointly and severally”- meaning Attorneys can make decisions on their own or with other Attorneys. An alternative to this is appointing all Attorneys “jointly” which means all Attorneys have to agree on a decision.
At the time of making a Lasting Power of Attorney, Donors can nominate other people (“Replacement Attorneys”) to replace the original Attorney or Attorneys should they become unable to act at some point in the future.
Finally it is worth noting that in their Lasting Powers of Attorney Donors can include Preferences (which are things Attorneys should keep in mind when making decisions on a Donor’s behalf) and Instructions (which are things that Attorneys must do). Important wording for a Donor to include in this respect is a statement authorising Attorneys to use a discretionary managed scheme in relation to investment holdings. A discretionary managed investment portfolio enables the investment manager to choose how monies are invested, within certain parameters, to get the best possible return. This investment structure is not suitable for everyone, but if in the future it is established that this would be the best use of funds and Attorneys need the ability to make use of this structure to ensure they are acting in a Donor’s best interests, discretionary fund managers upon accepting instructions from an Attorney will wish to see this provision included in a Lasting Power of Attorney.
For more information on the article above contact Victoria Green.