Most types of estate planning protect your loved ones, your estate and assets after your death. LPAs or Lasting Powers of Attorney are the best way to protect you and your finances in your lifetime. Read on to learn more…
What Does It Mean To ‘Manage Someone’s Affairs’?
Managing someone else’s affairs can mean a number of things, including:
- Looking after their bank accounts and other finances
- Buying and selling property on their behalf
- Claiming benefits on their behalf
- Budgeting for them
- Deciding where they live
- Making decisions about their daily life, personal care, or health care
This might be needed if someone:
- is ill or disabled, either temporarily or on a long-term basis
- is unable to make decisions for themselves, because of mental illness or other reasons
Ways Of Managing A Person’s Affairs
There are different ways to manage someone’s affairs. The right method will depend mainly on the circumstances of the person whose affairs need managing, and whether or not they have mental capacity
When Does A Person Lack Mental Capacity?
If someone can make a safe and appropriate decision for themselves, they can be said to have mental capacity. If they aren’t able to make a decision because of some form of mental disability, they can be said to lack the mental capacity. The disability may be either temporary or permanent. The circumstances under which a lack of capacity may arise could be:
- dementia
- brain injury
- stroke
- alcohol or drug misuse
- the side-effects of medical treatment
Someone is unable to make a decision if they can’t:
- understand the information needed to help them make the decision, even when using simple language or by sign language.
- retain that information
- use the information given to help them make the decision or
- communicate their own decision in any way
Someone may lack the capacity to make all their own decisions or they may have the capacity to make certain decisions, but not others. Capacity is decided on each circumstance.
What Is A Lifetime Power Of Attorney?
A lasting (lifetime) power of attorney ( LPA ) is a legal document that lets a person (the ‘donor’) appoint one or more people (your ‘attorneys’) to help you make decisions or to make decisions on your behalf.
In order to nominate a lifetime power of attorney, you must be capable of making decisions for yourself (see above).
Lasting/Lifetime Power Of Attorney
If you want someone to look after your affairs for a long period of time, you can give them a lasting/lifetime power of attorney (LPA). An LPA is different from an ordinary power of attorney because:
- you can make an LPA which looks after your health and care decisions and one to look after your property and financial affairs
- an LPA must be registered before it can be used
- an LPA lets you choose people to look after your affairs if you lose mental capacity
Anyone can make an LPA in case they ever lose mental capacity.
You should also make an LPA if you have been diagnosed with, or think you might develop, an illness which might prevent you from making decisions at some time in the future.
The kinds of illness which might prevent you from making decisions for yourself include:
- dementia
- mental health issues
- brain injury
- alcohol or drug misuse
- the side-effects of medical treatment
You must make an LPA whilst you are still capable of making decisions for yourself.
Types Of LPA
- property and financial affairs LPA
- health and welfare LPA
You don’t have to make both types of LPA at one time.
Property And Financial Affairs
This type of LPA gives someone the authority to deal with and make decisions about issues like:
- buying or selling property
- bank, building society and other financial accounts
- welfare benefits or tax credits
- tax affairs
- debts
You can give someone power of attorney to deal with all your property and financial affairs or only specific things. Maybe you want them to operate a bank account but not to buy and sell property. If you want to make an LPA which only deals with certain matters, you should make sure that it is drawn up very carefully so that the attorney is very clear about what authority they have to deal with your affairs. Contact us today for a chat to see how we can help.
A property and financial affairs LPA will come into effect as soon as it is registered. This means that the attorney will be able to start making decisions straight away, even if you are still capable of making them yourself.. If you don’t want the attorney to be able to do this straight away, we will make sure that the LPA says this.
Health And Welfare
An LPA concerning health and welfare gives someone authority to make decisions about things like:
- where you live
- your day-to-day care, including what you wear and what you eat
- your healthcare and treatments
- Your contact, if any, with certain other people
You can make a health and welfare LPA which deals with all aspects of your personal welfare, or just certain things.
It’s not possible to use a health and welfare LPA until the person who made it has lost their mental capacity..
How Do I Make A Lifetime Power Of Attorney?
You must do this whilst you’re still able to make decisions for yourself. Now is better than never.
Choose the person who you want to look after your affairs very carefully and get in touch with us.
We will help you fill in the appropriate forms and register the LPA with the Office of the Public Guardian.
FAQs
Q. Who Can Be An Attorney
Anyone can be an attorney, as long as:
- they are capable of making decisions, and
- they are 18 or over
Sometimes a person who is bankrupt can’t be an attorney. If an attorney becomes bankrupt, power of attorney may be taken away.
Solicitors such as ourselves can act as an attorney. Professional attorneys can charge for their services. If your attorney is a friend or relative, they can get back out-of-pocket expenses. However, they can only get paid for carrying out their duties if the donor has agreed to this on the form.
Q. Can I Have More Than One Attorney
Yes, you can appoint more than one attorney. This can happen in one of two ways:
- Attorneys can be appointed to act together/ joint attorneys– in this case they must always act together. An advantage of this arrangement is that it makes it harder for an attorney to commit fraud or act against the interests of the donor. The disadvantage is that the whole power of attorney comes to an end if one attorney dies or becomes mentally incapable.
- Attorneys appointed to act together and independently (also known as joint and several attorneys) – This means that the signature or action of one attorney is as valid as if they were the only attorney. It also means that the power of attorney will continue in force if anything happens to one of the attorneys.
Q. What Are The Responsibilities Of An Attorney?
An attorney is placed in a position of trust and must always act in the best interests of the donor.
They can only do the things the donor has authorised you to do.
You can’t ask anyone else to carry out any of your duties, unless the donor has authorised you to do so.
You must keep up-to-date accounts of the donor’s financial affairs. When you are acting on the donor’s behalf and have to sign any documents, you should sign your usual signature and add, beneath the signature, the words Attorney for “…..”.
Q. What happens when someone loses mental capacity but there’s no Lifetime power of attorney?
Once a person has lost their mental capacity, it’s no longer possible to make a power of attorney
It is possible however, to apply to the Court of Protection for a decision to be made on a particular matter.
If there is a continuing need to make decisions, you can ask the Court of Protection to appoint you as a deputy. This is usually a family member or close friend. A deputy can make decisions about someone’s personal welfare, property and financial affairs.
If there’s no one suitable or willing to act as a deputy, the Court of Protection can appoint a professional.
Q. Who decides when capacity has been lost?
The Mental Capacity Act 2005 says a person cannot make a decision if,
- They cannot understand information relevant to a decision
- Retain information long enough to make a decision
- Use the information
- Communicate the decision
Lasting Power of Attorney is a powerful way of protecting decisions made about you in your lifetime
Whilst discussing your Estate Planning with our Experts, why not find out more about LPA’s and how they could benefit your future. Contact us today.